01-15-2012 08:35 PM
I have a question that's been on my mind. So I had a car lease 5 years ago that I turned in on the day it was due, but 3 payments were due at the time. This was considered a "voluntary repo", because prior payments were due at lease end. The OC entry on all CRA's are $0 balance, and status is: Paid/Closed/Voluntary repo. The OC hasn't updated the entry on my CR's since one month after it was turned in. Basically it hasn't been updated in 5 years.
I've gotten collection calls from 3-4 CA's over the years and really never spoken to them. The strange thing is I've never had a CA trade line for this repo ever. I find it strange, but think I know why. Can they not report on the CRA's because the OC is showing up as Paid/Closed? Also, how common is it for the OC to update the CRA's 5 years later?
Thanks for all the help!
01-16-2012 04:35 AM
First, the OC account.
A current status is one single, four letter word. When the current status is reported as "Paid," that means that the OC has posted to your CR that the debt, regardless of how paid, has been legally satisfied. It doesnt matter how it was paid, whether through a settlement for less than the full amount, or by whatever they did after the "repo" to recoup the debt.
$0 balance could, by itself, mean they sold the remaining debt, but when reported concurrent with a current status of Paid, they togther mean that the $0 balance also reflects satisfaction, in their minds, of the debt. So I am not surprised that you have seen no further reporting by the OC. They have said it all in their reporting.
Now,the debt collector.
First, they are questionable in that they apparently never sent you a formal dunning notice after their "calls" to you, which they were required to have done within 5 days of their very first call. Second, they have not reported to the CRAs, which is an indication that they are not willing to expose their actions to the dispute provisions of the FCRA. So their actions kinda lead to suspicion of their compliance with either the FCRA or the FDCPA.
My suggestion. The next time they call, DO answer the phone and establish an unquestionable first communication with you. That unequivicably establishes the requirement for dunning notice within 5 days.
Second, do you currently have their name and address? If so, dont wait for any dunning notice and immediately send them a DV letter. That triggers a cease collection bar on them, and also requires them to obtain verification of the debt from the alleged credtior, something I doubt that they can do in view of the OCs credit reporting.
If you dont have their name and address, more reason to pick up the phone and ask for it. Just requrest their name and correspondence address, tell them they will be hearing from you, and hang up. Use that address to DV them.
01-16-2012 07:55 AM
Thank you so much RobetEG. So my question is this: Any CA that has this account really wouldn't/can't put it on my CR's because they would have to open a trade line and show $0 balance and paid, is that correct? It would have to match the OC trade line that's currently showing $0 and Paid/Closed. Would I be correct? I guess they could report to the CRA's, but won't really accomplish much.
My thought was the CRA's won't allow the CA's to add a trade line to my reports because the OC of the debt reports it Paid/Closed. Thoughts would be great!
01-16-2012 08:07 AM
I'd theorize that the OC immediately sold the balance to the CA. Any sold debt by an OC would produce the "paid" and "closed" comment. Then CA or CAs try to collect but they either don't try or they don't care, or maybe they are lacking info to report. Who knows. I've seen a couple of posts in here whereby the vehicle owner gets in a wreck and the lender calls in the loan in full within a month. And because they didn't have GAP insurance, they wre up a creek. I've seen examples where the OC immediately sold the balance to a CA.
Did the OC update? If not, I don't think they will unless prodded or disputed.
01-16-2012 09:37 AM
Thank you for your input, but not sure if that's correct. If the OC had sold the debt, my reports would be updated with "Charge-Off" or "Transferred/Sold" I would think. The OC hasn't updated in over 5 years and it clearly says: "Paid/Closed" with a $0 balance. Nothing about being sold. RobertEG or anyone else have thoughts?
01-16-2012 01:04 PM - edited 01-16-2012 01:06 PM
A charge-off has nothing to do with sale of a debt. When they sell a debt, they dont report it as charged-off unless they have additionally taken that internal bookeeping measure.
Credit reporting relates to recording how the consumer stands regarding the debt, not the credtior. If an OC sells a debt, it is by definition still "unpaid" by the consumer. The OC notifies the CRA that the consumer no longer owes the debt to them by reporting a $0 balance due to them. They dont report paid by the consumer if they had some external business transaction to relieve some portion, or all, of their loss, such as a charge-off or sale at a discounted rate.
When a debt collector purchases a debt, they are still attempting to collect on a debt that was originaly owed to another, and thus it is stored in your credit file as a collection on the same debt, not a new trade line.
The amount reported by a debt collector could signify either that they are collecting on a debt still owned by and owed to another or that they are collection on a debt that was previously owed to another, but now owned by them.
01-16-2012 01:28 PM
But in this case, the OC is showing Paid/Closed. Wouldn't that mean the debt obligation from the consumer has been satisfied or "Paid"? If the OC reports to the CRA's that a debt obligation has been paid, a CA can't all of sudden show up and say, no the consumer owes a debt? That just doesn't make sense. The OC doesn't report that a debt is Paid/Closed if they sold a debt to a CA with a balance, would they?
01-16-2012 02:47 PM
The OC doesn't report that a debt is Paid/Closed if they sold a debt to a CA with a balance, would they?
They can. Now grant it sometimes they'll add more like "paid charge-off" after selling the debt. In the case of a repo, rarely would you see both "repo" and "charge-off" together in the comment area; it's one or the other.
01-16-2012 02:58 PM
All of your posts make sense! This debt has been passed around to 3-4 different CA's over the past 4 years or so and it's hard for me to believe that NONE of them have reported a collection account on my CR's. I guess that's what I'm wondering, but we all would be guessing! Maybe I've gotten lucky so far, who knows!
myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.>> About myFICO