Sue a CCC for calling a PIF a CO?

[LoneWolf52]

In 2007, I settled a Chase CC account for 90% of the amount I owed them. I was never late on the account. When I checked my credit reports a few months ago, I discovered that Chase had reported it since then as a charge-off, though it wasn't; they never sold this debt to a collection agency. They used the date I settled the account as the DoFD, so it won't drop off my credit report until Feb 2014. I pinged the CRAs to change it, so they changed it to "Paid for less than full amount" with the same drop-off date. Questions:

• Can Chase use the date that I settled the account as the DoFD?
• Should I threaten to sue Chase for calling it a charge-off when it wasn't (though they've since corrected that) and use the ITS as leverage to convince them to remove this from my credit reports? 
• If you read American Banker magazine, you know that the feds are investigating Chase's CCC operations right now, so would an ITS work with them or instead make them more likely to tell me to take a hike on this?

Any and all advice on how to remove this scrofulous derogatory from my credit report is eminently welcome!

[llecs]

Unfortunately creditors and FICO view and score settled accounts on par as a COs. While they should not have marked it as a CO, it is scored now as if it were CO'd. YMMV on future lenders and how they see it, especially at 5 yrs old.

If I settled, I'd much rather them use that listed DOFD date, than a later date. If the DOFD was prior to your settlement date, then that's something to fight for. DOFD is the date you first went late and never recovered.

Sue Chase? I wouldn't. Your SOL might be up. Also, if you are to sue, you have to show damages. What would your damages be? You'd have to show financial loss as a direct result of that CR showing a CO. Per FICO, the score wouldn't have been impacted any less by it showing as settled.

Try sending some GWs. Maybe they'll remove the settled comment. Some here had success with Chase deleting entire TLs.

[pizzadude]

+1 to the GW advice from llecs.    Chase is very receptive to GW these days, many times they will just delete old CO accounts.  

[RobertEG]

I would pursue it.

A creditor cannot charge-off a non-delinquent debt.  It must not only be delinquent, but must have reached a stage of delinquency where they make the additonal statement that the bad debt is now considered uncollectible.  It only takes a showing that one potential creditor pulled your CR while it reported a charge-off to show a negative effect on your ability to procure credit.  And even without damages, the finding by a court of false reporting of the information would mandate its removal from your CR.

"Paid for less than the full amount" is also a special comment reserved for payment of delinquent debt.  If the creditor chose to accept payment at any amount as full satisfaction of a debt, and the debt was never delinquent, then reporting of that special comment connontes delinquency of debt to anyone pulling your CR.

With regard to DOFD, sections 605(c) and 623(a)(5) clearly specify the definition of DOFD as being the commencement of delinquency.  The entire purpose of section 605(c) was to amend the FCRA, putting to bed the old arguements relating to the exclusion of a charge-off or collection as of other dates, such as the date they did the CO.

If they reported date of charge-off, their only defense would be ignorance of the FCRA.  That doesnt win in court.

They have commited so many false reportings that I, personally, would pursue it.  I opine that it will most likely cause them to delete the reporting in order to cover their hind-quarters.  I would begin with a lettter of complaint to the FTC, with a cc to the creditor. I know the FTC wont litigate for you, but they will at least send a nasty-gram to the creditor.

[AndySoCal]

The account status should be reported as paid or settled depending on which bureau is reporting it. Experian has an account status of settled.  if it is reporting as paid the comment about for less than full balance is accurate.  What Chase does with the difference beween the balance that you owed and the balance you agreed to pay as part of the settlement should not be reported. (in my opinion) I would report the issue to Chase and give them the opportunity to fix it if they done then consider your options.

[LoneWolf52]

Robert, that's what I want to hear! It seemed to me that Chase pulled a sneaky trick on me, but I wasn't sure it was an illegal trick. I'll take your advice and pursue it with the FTC and cc Chase on it. Given their current troubles, I hope Chase will put this one behind them.

[LoneWolf52]

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@RobertEG wrote:

I would pursue it.

A creditor cannot charge-off a non-delinquent debt.  It must not only be delinquent, but must have reached a stage of delinquency where they make the additonal statement that the bad debt is now considered uncollectible.  It only takes a showing that one potential creditor pulled your CR while it reported a charge-off to show a negative effect on your ability to procure credit.  And even without damages, the finding by a court of false reporting of the information would mandate its removal from your CR.

"Paid for less than the full amount" is also a special comment reserved for payment of delinquent debt.  If the creditor chose to accept payment at any amount as full satisfaction of a debt, and the debt was never delinquent, then reporting of that special comment connontes delinquency of debt to anyone pulling your CR.

With regard to DOFD, sections 605(c) and 623(a)(5) clearly specify the definition of DOFD as being the commencement of delinquency.  The entire purpose of section 605(c) was to amend the FCRA, putting to bed the old arguements relating to the exclusion of a charge-off or collection as of other dates, such as the date they did the CO.

If they reported date of charge-off, their only defense would be ignorance of the FCRA.  That doesnt win in court.

They have commited so many false reportings that I, personally, would pursue it.  I opine that it will most likely cause them to delete the reporting in order to cover their hind-quarters.  I would begin with a lettter of complaint to the FTC, with a cc to the creditor. I know the FTC wont litigate for you, but they will at least send a nasty-gram to the creditor.

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Robert,

I did as you suggested: Sent a complaint to the FTC that explained the situation, and cc'd Chase. I just got a letter back from Chase that says the following:

We have completed our research for your request and, as a result of our investigation, we have requested an update of your account information with the Equifax, Experian and Trans Union credit bureaus. Our records indicate that we received your settlement payment on April 05, 5007. Based on that information, our update will note that the account is closed, settled in full for less than the full amount, and reflects a zero balance. During the interim, you may provide the appropriate party with a copy of this letter as notice of the current status of this account with our bank.

This is exactly how they were reporting this account before! What should I do now? Send them a ITS letter and cc my lawyer?

[RobertEG]

Ask them what specific credit reporting code permits reporting of a satisfied, non-delinquent debt as paid for less than the full amount.

That special comment code applies only to paying of delinqent debt.

I would immediately file a dispute through the CRA, who has more knowledge of credit reporting than the creditor, and dispute the accuracy of their reporting of paid for less on a debt that was never delinquent.  The CRAs have, through their reinvestigative rights, the ability to correct reporting that is factually incorrect.

I would additionally file a direct dispute with the creditor, disputing the accuracy of reporting a charge-off on a non-delinquent debt.  The IRS definition of a charge-off is a deliquent debt that has reached the level where it is considered "uncollectible."  Inquiry as to whether they reported a charge-off to the IRS, and if not, how they can consider it as a charge-off.

Those are two separate issues, so I would send two separate disputes.

[Anonymous]

It would seem to me that the proper way to report this debt would be "Paid as agreed."  Assuming your account was not delinquent, I don't see a basis for reporting it as settled for less.  As RobertEG said, that should be for charged-off debt.  IMO, by accepting a settlement, you and Chase agreed to a a new modified agreement.  By agreeing to accept your settlement, your agreement with them changed, and you paid it as agreed.

[AndySoCal]

jimbo831,

The settled for less than balance would come from he paid only 90% of the amount. owed according the OP original post