@Anonymous wrote:
Is there anything that can be done to prevent this "rehashing" of old collections? Are there any predatory laws that prevent this? Do the borrowers have any options other than paying these accounts off which in many cases are either too old to dispute or borrower can not locate original creditor?
Couple of issues.
First, if it's really old, then it may be too old to report.
Second, sometimes the OC gives it to a CA, who gives it to another CA, who gives it to yet another CA, and so on. If this is the case, the debtor can and should send a DV letter to each of the CAs. The same debt cannot be assigned and reported multiple times by multiple CAs.
Third, when you sit down to talk with someone, ask them some tough questions. "Look, this information stays just with us, OK? If you know, or suspect, or think maybe there's an old collection out there on my credit reports, somewhere, just be honest and tell me. There's no shame. I've seen it all and I'm not going to judge you."
Reason for this is, you can tell them before you ever pull their CRs to go out to ACRDC and get their CRs themselves. Free. No INQs will show up indicating "North By Northwest Mortgage Lending". If a CA sees that on a CR, then they might think "AHA, I've got this debtor by the short hairs. They want a mortgage, and I'm not going to give an inch in negotiations."
Finally, if the information on a person's CRs is accurate and complete, and within the CRTP, then it's perfectly legal for a CA to update their reporting EVERY MONTH and thereby ding a person's FICO scores lower. Makes ya wonder why consumers haven't shifted their ire from banking to the credit industry. Ah, well, I suspect they'll get their due. Hope I get good seat when the gallows are erected.
