DOFD - Equifax / TransUnion

[RobertEG]

The debt collector is correct in asserting that they have complied with the FCRA if the date they reported was obtained from the creditor.

FCRA 623(a)(5)(B)(ii) states that they have fulfilled their requirements for reporting a DOFD if they "obtain the date of delinquency from the creditor."

The DOFD did not occur based on any activities conducted by or with the debt collector, it occured under the OC.  So they are the required source of any reporting by the debt collector.  The statute requires only that they obtain that date from the OC, not that they somehow conduct an internal investigation of internal OC records.

I am assuming in your scenario that the OC did not also reported a DOFD, such as if they werent reporting to their account to the CRA at the time of their collection referral.  If the OC was reporting, they also were required to have reported the DOFD.  In that situation, section 623(a)(5)(B)(ii) does not even come into play.

The date reported by the OC would then stand as the date required to have been reported by the debt collector under the provisions of section 623(a)(5)(B)(i).

[hotpoint]

Thanks for the response . . . here is there reply, 

"Our legal department has examined the information that you provided in regards to the FCRA and they have informed me that with respect to any delinquent account that is placed for collection (internally or by referral to a third party, whichever is earlier), charged to profit and loss, or subjected to any similar action, upon the expiration of the 180-day period beginning on the date of the commencement of the delinquency which immediately preceded the collection activity, charge to profit and loss, or similar action.

The statute states that the 180-day period begins on the date of the commencement of the delinquency, but does not say what is considered the actual commencement date.  Our charter was searched and we were unable to find anything stating the date of delinquency and believe that since there are no statutes that state the issue, and that there is no Tennessee case law governing the issue, that the reasonable decision would be to follow NES/industry practice.  In keeping with that practice, the date of delinquency remains Feb. 26, 2006 rather than the date you expressed as July 27, 2005."

______________________________________________________________________________________________________________

Robert, I need your opinion.  This is a previous utility bill.  My statement/payment history shows a zero balance for the month of June, 05', and the statements shows that the bill was paid late for the month of July and each month there after (never brought the account up-to-date).

I left the area, and closed the account Jan. 06' and unknowningly left a balance of $180.00.  The account was turned over to a collection comp.  I paid the bill to the OC w/o knowledge.  From reading several forums, I had the understanding that the DOFD was July 2005 and not Feb. 2006.  My statements shows a late charge for each month.  Your knowledge is clearly appreciated.

HotPoint

[scmami]

I'm not a pro, like RobertEG, who I admire. But didn't you say this was a utility bill? Do the same rules apply? I mean, if it was a credit card, the account would have had to been 30 days late and never brought current to be less than 30 days behind. But a utility bill doesn't report to the CRAs every month right? (At least none in my state do) So the DOFD for a non reporting debt (cell phone bill, utility, membership fees) would be the date the account was charged off, right? This was my understanding... Please correct me if I'm mistaken.

[RobertEG]

DOFD is not "different" for utilities.  It is the same for all types of debt... the date you first went delinquent (commencement of delinquency) and the account was thereafter not brought into good standing, thus providing for a new commmencement.  Date of charge off is irrelevant.

There are literally tons and tons of precedent, both in the form of FTC opinions, congressional history, and legal decisions, that contradict their statement that "commencement of date of delinquency" is not defined.  The statute may not go into detail, and does not even use the term DOFD, but there is NO statutory ambiguity.

"Commencement of delinquency" is the date you became first became delinquent.  You dont commence new delinquency until the account is no longer delinquent, and a new delinquency is commenced.

The CRA credit reporting manual goes into excrutiating detail, with numerous examples, of what constitutes a proper reporting of DOFD.

If they continue to define DOFD otherwise, I would file an action in small claims court. 

If you contest and need case law to support your position, give a yell.

[hotpoint]

---

@RobertEG wrote:

DOFD is not "different" for utilities.  It is the same for all types of debt... the date you first went delinquent (commencement of delinquency) and the account was thereafter not brought into good standing, thus providing for a new commencement.  Date of charge off is irrelevant.

"Commencement of delinquency" is the date you became first became delinquent.  You don't commence new delinquency until the account is no longer delinquent, and a new delinquency is commenced.

The CRA credit reporting manual goes into excruciating detail, with numerous examples, of what constitutes a proper reporting of DOFD.

If they continue to define DOFD otherwise, I would file an action in small claims court. 

If you contest and need case law to support your position, give a yell.

---

Thanks Robert,

Please keep in mind, the account continued for over three years.  Unfortunately, I had a really bad payment history with the source.  I had a zero balance for my June 05' payment.  I was late paying my July payment and each month there after (according to my statement), and accumulating late charges.  I closed the account Jan. 06', which lead to the collection.  

The OC "continues to define DOFD otherwise", therefore I intent to contest and will need any case law, and/or support you can provide.

-Best Regards,

 HotPoint

[RobertEG]

Start with the FTC Staff Opinion letters, which can be found on the FTC webpage under FCRA staff opinion letters.

The first is Brinkerhoff-Johnson, which addresses the issue as follows:

"We are not in accord with the contention that the date "when (the creditor) first reported" the chargeoff to the CRA constituted the start of the delinquency. Sections 605(c)(1) and 623(a)(5) were recently added to the FCRA to correct the ineffectiveness of the previous FCRA, under which the date that started the seven-year period was uncertain or under the control of the creditor.(1) The legislative history of these provisions makes it clear that they were designed to correct the often lengthy extension of the period that resulted from delayed creditor action:

Current law generally prohibits consumer reporting agencies from including in a consumer report accounts placed for collection or charged to profit and loss which antedate the report by more than seven years. The Committee is concerned that this seven year limitation is ineffective. In some cases, the ... action occurs months or even years after the commencement of the preceding delinquency. ... Consequently, the consumer report may contain such information even if the delinquency commences more than seven years before the date on which the report is provided to a user.

The Committee bill specifies that the seven-year period with respect to information concerning a delinquent account charged to profit and loss . . . may begin no more than 180 days after the commencement of the delinquency immediately preceding the ... action.

S. Rept. 104-185, 104th Cong., 1st Sess. 39-40 (emphasis added).

"Thus, Congress intended to establish a date certain -- the start of the delinquency -- to begin the obsolescence period (now seven years, plus 180 days).(2) The alternate view stated to you (that the date of reporting controls) is at variance with both the plain language of these amendments, and the intent of Congress in enacting them.

"In sum, we believe that the phrase "commencement of the delinquency that led to the action" in Sections 605(c)(1) and 623(a)(5) of the FCRA should be construed according to its normal meaning. If a consumer falls behind on an account and never catches up, the delinquency has its "commencement" when the first payment is missed. From that point on, the account is past due and thus delinquent."

See, also, the Kosmerl and Amason staff opinion letters.

[hotpoint]

Thanks RobertEG,

Keep you posted . . .

HotPoint

[hotpoint]

Well here is an update:

After  registering a complaint and speaking with the Atty. that governs the standards for CA's for the state, and speaking w/the Atty. for the OC.  The Atty; for the OC has decided to accept the rule (FCRA) and delete the CO from my report, but not w/o casually mentioning  "although we believe our standards and actions were warranted we will have the CB's to stop reporting the account."  It was the words "stop reporting" that alarmed me and prompted another phone call to the OC, and I certainly could tell they were sick and tired of hearing from me, but I wanted to make certain that his was going to be deleted.

The results:  EX has deleted and score increased from 711 to 742 (Vantage Plus).  EQ has yet to update.

Thanks RobertEG . . .

HotPoint