Help!!! Fraudulent Collection Account added to report while I'm waiting to close!!! **UPDATED**

[Anonymous]

Hello All:

I am in the midst of trying to close on a new house and a collection agency has added a collection account to my Transunion report.  You can imagine having this come up is causing me a lot of stress!!  Long story short, a collection account that is incorrect, which I previously disputed (with the collection agency and credit bureau) and had deleted in December of 2015 has been re-added to my Transunion Credit Report.  I got the alert today.  It has not, to my knowledge, been added to my report at either of the other two credit bureaus.  This debt is fraudulent and the collection agency cannot/has not legally validated the veracity of any account or debt for which they can pursue collection activity.  It is my belief that they checked my credit report and saw a mortgage inquiry and have replaced this collection account on my report in an attempt to extort a payment from me.  I am currently scheduled to close on July 18th, so I want to get this handled as soon as possible.  Any help that any of you can provide would be greatly appreciated!!!

[StartingOver10]

Talk to your loan officer.  It's very possible they won't pull your credit again or if they do, that the collection won't be counted against you. Have a frank discussion with your LO tomorrow.

[DallasLoanGuy]

likely will not be a problem. talk to LO

i would hire a credit attorney to send a "intent to sue" letter.

[Anonymous]

I wanted to come in and post an update, because I hate when I reply or am following a chain and I don't get to hear the resolution...LOL!  First, as everyone mentioned I did reach out to my loan officer IMMEDIATELY!  Contrary to my previous credit issues, I am a pretty on top of it person and I like to be very forthcoming.  I had already sent him a thorough message before posting here.  His response was consistent with what you all predicted...it shouldn't be a problem, he was glad I had a handle on it early, and it would likely not come up in the pre closing audit.  However, being the easily frustrated/process oriented person that I am...I filed a complaint with the Consumer Financial Protection Bureau because I felt this was a fradulent activity.  Happily, the debt collector responded to my complaint with CFPB in 24 hours and agreed to close the account in their office and delete the collection from my credit report!!!  I can't say enough about how what I have learned through the myFICO community has completely changed my relationship with my credit profile.  I have a lot of room to grow, but I feel very empowered to improve!!!  Thanks to all who replied and to anyone who is facing a similar situation, stay calm and be vigilant.  Now, everyone keep your fingers crossed that all other things move smoothly toward closing!  It's still on schedule for July 18!

[DallasLoanGuy]

can you exand on the complaint to cfpb?  how did you do that?  my clients might need to do this in the future

[Anonymous]

I'm happy to expand.  First, for the stalwarts on the boards...CFPB is NOT a credit repair agency and should be used only when a consumer has a valid complaint for which they need relief.  That being said, CFPB has an excellent online complaint tool that functions very similarly to the online dispute tool that the credit reporting agencies use.  Additionally, the CFPB provides a complete database of previously submitted complaints, offending companies, whether they responded in a timely fashion, and the outcome.  The complaint tool  allows for you to enter in a narrative about your specific greivance, provide account numbers and pertinent details for the credit profile/account entry, AND upload supporting documents.  CFPB will reach out to the collection agency or creditor on your behalf.  A key difference is that unlike the 30 day dispute process afforded consumers by FCRA, financial institutions have 15 days to respond to a complaint lodged through CFPB.  Because it is a government agency, most creditors respond RIGHT AWAY and offer some proposed solution immediately.  In my case, that was a promise of a closed account and deletion.  For mortgage applicants the documentation from CFPB can be paired with a memo and be used to satisfy any underwriting conditions.  Which is very helpful.  I'm happy to answer any specific questions that people have about what I personally submitted.