Paying Debt to In-House Collection Company

[Anonymous]

I have a debt that I legitimately owe and I want to pay it off. It's reporting on my CR under the CA's name, however they don't OWN the debt. They are an in-house collections department for the OC. The OC hasn't (and doesn't) ever report debt to the credit bureaus, only the CA does. I checked my account online with the OC and am able to pay the debt directly to them. 

It is my understanding that if you pay the OC in full, then the CA (or in this case I'd probably call them the Collections Department) would remove the file from my CR because the debt is no longer owed. And because the CA is in-house, by paying the OC, I'm sort of indirectly paying the CA too because they are just an internal department of the same entity as the OC. Am I correct on this?

I'd rather pay the OC if it will result in the removal of the CA file from my CR. If the file wouldn't be deleted, then I'll send a PFD. I'm just trying to find the quickest way to get it done and a PFD is definitely not the fastest route.

[Anonymous]

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@Anonymous wrote:

I have a debt that I legitimately owe and I want to pay it off. It's reporting on my CR under the CA's name, however they don't OWN the debt. They are an in-house collections department for the OC. The OC hasn't (and doesn't) ever report debt to the credit bureaus, only the CA does. I checked my account online with the OC and am able to pay the debt directly to them. 

It is my understanding that if you pay the OC in full, then the CA (or in this case I'd probably call them the Collections Department) would remove the file from my CR because the debt is no longer owed. And because the CA is in-house, by paying the OC, I'm sort of indirectly paying the CA too because they are just an internal department of the same entity as the OC. Am I correct on this?

I'd rather pay the OC if it will result in the removal of the CA file from my CR. If the file wouldn't be deleted, then I'll send a PFD. I'm just trying to find the quickest way to get it done and a PFD is definitely not the fastest route.

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Paying the OC does not, in any way, obligate the CA to remove their report, no matter what the business relationship is. Your best option is to negotiate a PFD.

[Anonymous]

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@Anonymous wrote:

 Paying the OC does not, in any way, obligate the CA to remove their report, no matter what the business relationship is. Your best option is to negotiate a PFD.

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 But if it's the same company and it's the internal collections department of that company that's trying to collect the debt, wouldn't that change the situation? I can see where a PFD would be the way to go if the OC had hired a collection agent to recover the money, but it doesn't sound like the OC "hired" the collection agency. I could be wrong but it appears that they are just an internal department where delinquent accounts go. 

Maybe contacting the OC and asking about it would be a good place to start?

[RobertEG]

They are being shown as a collection because they quailfy as a debt collector.

The FDCPA specifically provides that an in-house collection department of a creditor qualifies as a debt collector under that statute if they use a name that separately differentiates themselves from the name of the original creditor.  If the creditor chooses to use a separate name that separates themselves from the OC, they also subject themselves to all of the provisions of the FDCPA, such as the requimrent for dunning notice and compliance with the provisons of the DV process.

If the CRA is accepting their reporting as that of a debt collector, then the CRA policy of not deleting based on payment to the OC applies.