unlicensed collection agency

[boonelb]

If a collection agency is not licensed in the state of Tennessee and that is your residence, can you get them removed from your credit report on that basis?

[pipeguy]

From your credit report?

No...

A Credit report tradeline is not the same as collection activity in that regard.

[Anonymous]

Hmmm, interesting...

I had a collection agency trying to collect from me while reporting the collection account on my credit report.

Once I found out that they were not licensed/bonded in my state, I immediately sent the CA and my state AG a letter that the CA was not licensed to do business in my state, yet they were trying to collect on a debt and it was listed on my credit report. I asked for removal and within 10 days, the collection account was gone.

Now, the collection agency can "farm out" the collection account to someone who is licensed in your state who is authorized to collect on comsumer debts, so they don't have to apply for any business license, pay fees, and pay a bond.

Last, the collection agency can re-sell or transfer the account to another collection agency that is licensed/bonded in your state, and that can pop up on your credit report as well.

Hope that helps

[boonelb]

The agency had not tried to contact me.  I had not contacted them as I did not want to wake sleeping dogs.  They will be off before I am ready to deal with them.  I do owe, I just dont know what the original total was. 

[pipeguy]

I've never heard of a requirement for a CA to be licensed in every state just to list a "factual" tradeline, although I suppose its possible. I also know that placing a collection status on a collection by a CA is considered a "collection effort" but again, we're not taking going to court here (LVNV got in deep doo doo in Maryland for doing that un-licensed). If the debt is actually still owned by the OC then I believe the terms of the agreement would apply and in that case the address of the OC's credit agreement would have some bearing.

I don't know, maybe RobertEG can offer an opinion on this question. I can't imagine that 3600 CA companies in the USA have to be licensed in every state just to list a tradeline.

[Anonymous]

I actually agree with labsxtwo...

I have an open HSBC/LVNV Funding mark on my CR (which is listed as LVNV being the owner of the account and the account is considered OPEN)...by listing a negative OPEN TL on my CR, they are attempting to collect a debt...if they are not licensed in my state, I don't have to pay them...if I don't have to pay them, then either the item should not be listed on my report, or it should be switched to an open postive account (ha ha ha). FWIW, they have NOT sent ANY letters nor made ANY phone calls.

In response to pipeguy with regards to 3,600 CA's being licensed, etc...the bigger ones ARE usually licensed everywhere...Portfolio, Midland, etc.

On another note, I had a Medical account that was arguably JUST inside the SOL (they COULD have filed suit) from NY (I'm now in CT). When I contacted the CA, I asked for validation, insurance EOB's, etc. They responded with "We are not licensed to collect debt in the state of CT...we are no longer actuvely pursuing this account...the TL's have been deleted off of EQ, EX, and TL...please contact EQ, EX, and TL if they still remain after 30 days..." Talk about a happy camper!

I think I'm going to try the whole not licensed thing with LVNV...and send copies to the CR's...we'll see what happens...

[RobertEG]

Licensing/bonding is not mentioned as a requirement in either the FCRA or the FDCPA for conducting debt collection or reporting to a CRA.

So probably no basis for bringing action in federal court.

However, many states do require bonding and/or licensing in their debt collection codes.

If conducting collection in a given jurisdiction is not legal under state statute, remedy for reporting to a CRA, as a debt collection practice, would be addressed by civil action under state civil code.  Certainly, a remedy sought in state court could include such collection practices. 

It appears to be more a matter of jurisdiction, state vs federal, as to where remedy can be sought.