No, it wouldn't hurt your credit, but I'd still try to get it rectified by reaching out to Citi and asking them to delete that comment.
@Anonymous wrote:And what happens when this is on the account for a collection agency, but you have proof that it was paid to the original creditor? The collection has updated it to $0 balance and closed, but continues to verify it as accurate. So what are my options?
If you paid the OC, they should have recalled the debt from the CA, and the CA should remove their tradeline from your report. Once an OC recalls the debt, the CA no longer has collection authority, and has to delete. I would reach out to the OC, and ask them to get their CA to remove the collection since they recalled the debt, and you paid it. If they can't/won't help, I'd call the CA yourself, and tell them the same, and that you're going to file a complaint if they don't remove the collection account. Did you dispute the collection with the CRAs yourself already? If not, you can dispute with the CRAs, and provide the documentation that the OC recalled the debt, and you paid it. If you already did this to no avail...Last resort, file a CFPB complaint, state attorney general, etc.
@SoonerSoldier33 wrote:
@Anonymous wrote:And what happens when this is on the account for a collection agency, but you have proof that it was paid to the original creditor? The collection has updated it to $0 balance and closed, but continues to verify it as accurate. So what are my options?
If you paid the OC, they should have recalled the debt from the CA, and the CA should remove their tradeline from your report. Once an OC recalls the debt, the CA no longer has collection authority, and has to delete. I would reach out to the OC, and ask them to get their CA to remove the collection since they recalled the debt, and you paid it. If they can't/won't help, I'd call the CA yourself, and tell them the same, and that you're going to file a complaint if they don't remove the collection account. Did you dispute the collection with the CRAs yourself already? If not, you can dispute with the CRAs, and provide the documentation that the OC recalled the debt, and you paid it. If you already did this to no avail...Last resort, file a CFPB complaint, state attorney general, etc.
But what if the @Anonymous DIDN'T recall the debt prior to paying the debt? If rod went around the CA and paid the OC directly, then there is no debt recall involved and thus the CA's reporting can remain. Only if rod negotiated a recall of the debt with the OC BEFORE paying would your statement apply. Just because the debt is paid, it doesn't automatically mean the CA has to delete their TL. That actually goes against the CRA reporting manual. You're right that if collection authority is terminated, then the TL must be deleted, but paying off the debt, whether to the OC or the CA, doesn't mean collection authority is terminated. Again, the OC would have had to recall the debt from the CA prior to accepting payment in order for your statements to apply.
You're right that if collection authority is terminated, then the TL must be deleted, but paying off the debt, whether to the OC or the CA, doesn't mean collection authority is terminated. Again, the OC would have had to recall the debt from the CA prior to accepting payment in order for your statements to apply.
It's a good point. I guess I assumed the OP got the OC to recall the debt before paying it. If not, it's probably being reported accurately by both OC and CA. In that case, let the goodwill campaign begin. It's probably the only option left to get the CA removed.
@bass_playr wrote:With respect, I must disagree.
Once a debt is paid, there is no collection authority at all. The difference here is that the CA was a third party debt collector, collecting on behalf of the OC, which accepted payment for the account. Collection authority no longer exists the moment there is no longer anything to collect.
Now, if the CA were a debt buyer and now owned the account, that would possibly be different, as they would be a creditor under the law. A third party debt collector's authority can only come from the creditor that hired them. Once there's nothing to collect, no one has collection authority anymore. As a matter of law, being the creditor allows the OC to keep the report on the consumer's credit file even after it is paid. But the third party collector's authority ceases the moment the OC accepts payment. In effect, what I'm suggesting is that the OC's act of accepting payment personally should demonstrate their intent to recall the debt. Nothing more should be needed. There should be no difference between the OC recalling prior to payment and the OC recalling BY accepting payment. They hire the CA to collect, so if they choose to collect it themselves, they have overridden the agreement with the CA. This is just my opinion and I'm not an attorney.
Remember this--a furnisher of information has the right under the law to update the report as long as FCRA allows it to be shown. But a third party no longer has the authority to undertake any debt collection effort or related effort once there's no longer anything to collect. At that point, one could argue that any further efforts would amount to harassment. While not all states have said that credit reporting is collection activity, it shouldn't even matter IMHO in this instance because they no longer have any authority to pursue anything. Especially if the OC chose of its own volition to collect regardless of the agreement with the CA.
This argument has been tried before and it fails every time. When a CA is engaged and the OC collects they still have to pay the CA their cut. There is no automatic termination of collection authority if you pay the OC. To get the CA off you must get the OC to recall it prior to any money changing hands.
