No debt collector can report anything if they dont, at that time, have an agreement with the OC to act on their behalf as a debt collection agent.
If they HAD a prior agreement, and reported a collection to a CRA while acting as a legitmate collection agent for the OC, and the OC later terminated that agreement, that of course prevents the CA from subsequent reporting. But it does not erase the legitimacy of their prior reporting.
The debt collector must, of course, update their credit reporting to reflect their termination of collection activities by reporting a status on the CA as $0 debt due to them., and cease any further reporting.
That does not compel deletion of prior, accurate CA reporting. Credit reporting is not about who owns a debt, it is about the accurate reporting of delinquencies and activities taken to secure payment.
THe CA reported accurately.
