Advice Needed - Settled State Farm Charge Off

[Anonymous]

I am having a problem with a settled charge off with State Farm Bank for a credit card.

A brief timeline:

• The account was charged off for the amount of $3606 and sent out for collections with Sessoms and Rogers in fall of 2017.  They eventually got a judgement against me.
• I settled the account with Sessoms in early June for the amount of $2885, with payment made on June 9th.
• I received a confirmation letter from them on June 25th stating the following:
  • "This is to confirm that, as of the payment credited on June 9th, 2020, the above referenced account has been resolved as settled in full for the total settlement amount of $2885."

This isn't the first account I've settled and I've been fortunate that every other creditor then reported the account as "settled in full for less than the full account balance" and also reported a zero balance.  Not in this case.

Here is how they are reporting it as of my lastest 3B report...

	EQUIFAX	TRANSUNION	EXPERIAN
Last Updated	Jun-20	May-20	Jun-20
Payment Status	Charge-off	Payment after charge off/collection	Unpaid balance reported as a loss by credit grantor
Worst Delinquency	Bad debt/collection	None Reported	Charge Off/Other Derog
Balance	$721	$0	$721
Credit Limit	$3,000	$3,000	$3,000
Credit Utilization	24%	–	24%
Closed Date	–	11/10/2017	–
Open Date	Jan-17	Jan-17	Jan-17
Last Activity	Sep-17	Aug-17	–
Terms	–	–	Revolving
Scheduled Payment	–	–	–
High Balance	–	$3,606	–
Loan Type	Credit Card	Credit Card	Credit Card
Responsibility	Individual	Individual Account	Individual
Company Name	State Farm Bank	State Farm Bank	State Farm Bank, F.S.B
Account Number	XXXXXXXX	XXXX	XXXXXXXX
Contact Info	Attn Credit Reporting - Bloomington, IL (877) 734-2265
Comments	Consumer disputes - reinvestigation in progress	Account closed by credit grantor	Account Closed At Credit Grantor's Request

They are reporting a residual balance even though I clearly settled the account in full.  I have disputed this via the credit bureaus and it was kicked back as "accurate."  I called State Farm and they told me this was their policy.  

However, what is upsetting about this is on my equifax and experian credit reports that balance is showing as "PAST DUE" and I am concerned this is going to continue to hurt my credit score.  I sent a dispute letter to State Farm in writing about this as a "past due" balance indicates a financial obligation still owed by me, and in theory could still be sent out to collections.  They were extremely rude on the phone and refused to let me speak to a manager, didnt care what my letter said etc.

For example, here is how the data is reported on my actual Equifax credit report:

Status as of Jun, 2020
Date opened Jan, 2017
Date of last activity Sep, 2017
Date closed Nov, 2017
Loan type Credit Card
Credit limit $3,000
Account Type Revolving
Account holder Individual
Industry All Banks
Descriptions
Consumer disputes - reinvestigation in progress

Balance      Current Status      Past Due Amount
$721           Charge-off             $721
Seven year payment history
30 days late 1 time
60 days late 1 time
90+ days late/other derogatory 30 times (May 2020, Apr 2020, Mar 2020, Feb 2020, Jan 2020, Dec 2019,
Nov 2019, Oct 2019, Sep 2019, Aug 2019, Jul 2019, Jun 2019, May 2019,
Apr 2019, Mar 2019, Feb 2019, Jan 2019, Dec 2018, Nov 2018, Oct 2018,
Sep 2018, Aug 2018, Jul 2018, Jun 2018)

So my questions:

1.   Am I pursuing this the right way?  Am I justified that it should be reported as a 0 balance?
2.   If they are allowed to still record the deficit (residual balance) on the credit report, surely they are in error listing it as a PAST DUE balance, correct?
3.   Is this reporting hurting my credit vs it being reported as zero?

Thanks!

[Anonymous]

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@Anonymous wrote:

I am having a problem with a settled charge off with State Farm Bank for a credit card.

A brief timeline:

• The account was charged off for the amount of $3606 and sent out for collections with Sessoms and Rogers in fall of 2017.  They eventually got a judgement against me.
• I settled the account with Sessoms in early June for the amount of $2885, with payment made on June 9th.
• I received a confirmation letter from them on June 25th stating the following:
  • "This is to confirm that, as of the payment credited on June 9th, 2020, the above referenced account has been resolved as settled in full for the total settlement amount of $2885."

This isn't the first account I've settled and I've been fortunate that every other creditor then reported the account as "settled in full for less than the full account balance" and also reported a zero balance.  Not in this case.

Here is how they are reporting it as of my lastest 3B report...

	EQUIFAX	TRANSUNION	EXPERIAN
Last Updated	Jun-20	May-20	Jun-20
Payment Status	Charge-off	Payment after charge off/collection	Unpaid balance reported as a loss by credit grantor
Worst Delinquency	Bad debt/collection	None Reported	Charge Off/Other Derog
Balance	$721	$0	$721
Credit Limit	$3,000	$3,000	$3,000
Credit Utilization	24%	–	24%
Closed Date	–	11/10/2017	–
Open Date	Jan-17	Jan-17	Jan-17
Last Activity	Sep-17	Aug-17	–
Terms	–	–	Revolving
Scheduled Payment	–	–	–
High Balance	–	$3,606	–
Loan Type	Credit Card	Credit Card	Credit Card
Responsibility	Individual	Individual Account	Individual
Company Name	State Farm Bank	State Farm Bank	State Farm Bank, F.S.B
Account Number	XXXXXXXX	XXXX	XXXXXXXX
Contact Info	Attn Credit Reporting - Bloomington, IL (877) 734-2265
Comments	Consumer disputes - reinvestigation in progress	Account closed by credit grantor	Account Closed At Credit Grantor's Request

They are reporting a residual balance even though I clearly settled the account in full.  I have disputed this via the credit bureaus and it was kicked back as "accurate."  I called State Farm and they told me this was their policy.  

However, what is upsetting about this is on my equifax and experian credit reports that balance is showing as "PAST DUE" and I am concerned this is going to continue to hurt my credit score.  I sent a dispute letter to State Farm in writing about this as a "past due" balance indicates a financial obligation still owed by me, and in theory could still be sent out to collections.  They were extremely rude on the phone and refused to let me speak to a manager, didnt care what my letter said etc.

For example, here is how the data is reported on my actual Equifax credit report:

Status as of Jun, 2020
Date opened Jan, 2017
Date of last activity Sep, 2017
Date closed Nov, 2017
Loan type Credit Card
Credit limit $3,000
Account Type Revolving
Account holder Individual
Industry All Banks
Descriptions
Consumer disputes - reinvestigation in progress

Balance      Current Status      Past Due Amount
$721           Charge-off             $721
Seven year payment history
30 days late 1 time
60 days late 1 time
90+ days late/other derogatory 30 times (May 2020, Apr 2020, Mar 2020, Feb 2020, Jan 2020, Dec 2019,
Nov 2019, Oct 2019, Sep 2019, Aug 2019, Jul 2019, Jun 2019, May 2019,
Apr 2019, Mar 2019, Feb 2019, Jan 2019, Dec 2018, Nov 2018, Oct 2018,
Sep 2018, Aug 2018, Jul 2018, Jun 2018)

So my questions:

1.   Am I pursuing this the right way?  Am I justified that it should be reported as a 0 balance?
2.   If they are allowed to still record the deficit (residual balance) on the credit report, surely they are in error listing it as a PAST DUE balance, correct?
3.   Is this reporting hurting my credit vs it being reported as zero?

Thanks!

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Welcome @Anonymous 

Yes it should be reported as a zero balance. No it should no longer say past due. Yes it is hurting your credit. Payment status should be CO, settled for less. 

Looks like a re-investigation is in process at Equifax, but if you can't get any satisfaction by doing a mail in dispute, certified mail return receipt requested, to the two bureaus that still have it on record with your supporting evidence, then you need to file a complaint with the CFPB. 

[Anonymous]

@Anonymous Thank you for the quick advice!

A follow up: I am settling a barclay card debt as well and already have a settlement offer letter from them.  Before I pay, is there any way to ensure they will report it appropriately?  They have been an absolute nightmare to negotiate with...very stubborn in their terms.  No pfd, etc...

[Anonymous]

I would not expect a PFD from Barclays. I would expect they will report accurately and if they do not you have to deal with it there’s no way to prevent it.

[Anonymous]

Update on the in progress equifax dispute.  That was the automated dispute submitted online with equifax.  The results came back this morning and are below.  State farm still refuses to update the account to show as settled in full.  Further, they are still actively reporting a past due balance and missed payments.

State Farm Bank should be receiving the dispute letter I referenced earlier sometime tomorrow and I guess I have to play the waiting game for a month for any resolution.

What I don't get is how they reported this correctly to Transunion but stubbornly refuse to report it correctly to Equifax and Experian.  I am afraid to even bring up the transunion info with them because I'm worried they might change it.

>>> We have researched the credit account. Account # − XXXX* The results are: This creditor has verified to OUR company that the balance is being
reported correctly. THE FOLLOWING FIELDS HAVE BEEN MODIFIED: *ACTIVITY DESIGNATOR *ACCOUNT HISTORY. If you have additional questions about
this item please contact: State Farm Bank Fin Cards, PO Box 2313, Bloomington IL 61702−2313 Phone: (877) 734−2265

The dispute results show the following:

As of Date:  7/17/2020

Balance Amount: $721

Amount Past Due: $721

Date of last Payment: 6/2020

Actual Payment Amount: $2885

---

@Anonymous wrote:
I would not expect a PFD from Barclays. I would expect they will report accurately and if they do not you have to deal with it there’s no way to prevent it.

---

Date of 1st Delinquency: 09/2017

Charge Off Amount:  $2879 - What the hell?  It was previously charged off for $3606...how can they now say the charge off was 2879?

Date Closed: 11/2017

Status:  Charge Off

Additional Information:  Charged Off Account

Account History with Status Codes is showing "L" (Charge Off) from March 2018 to June 2020

And just for historical reference, the 5/20 Historical account info before the settlement:

Balance:  3606

Date of Last Payment: 8/2017

Credit Limit: 3000

Amount Past Due:  3606

Activity Designator: Closed

Additional Info:  Charged Off Account - Account Closed By Credit Grantor

[Anonymous]

---

@Anonymous wrote:

Update on the in progress equifax dispute.  That was the automated dispute submitted online with equifax.  The results came back this morning and are below.  State farm still refuses to update the account to show as settled in full.  Further, they are still actively reporting a past due balance and missed payments.

State Farm Bank should be receiving the dispute letter I referenced earlier sometime tomorrow and I guess I have to play the waiting game for a month for any resolution.

What I don't get is how they reported this correctly to Transunion but stubbornly refuse to report it correctly to Equifax and Experian.  I am afraid to even bring up the transunion info with them because I'm worried they might change it.

>>> We have researched the credit account. Account # − XXXX* The results are: This creditor has verified to OUR company that the balance is being
reported correctly. THE FOLLOWING FIELDS HAVE BEEN MODIFIED: *ACTIVITY DESIGNATOR *ACCOUNT HISTORY. If you have additional questions about
this item please contact: State Farm Bank Fin Cards, PO Box 2313, Bloomington IL 61702−2313 Phone: (877) 734−2265

The dispute results show the following:

As of Date:  7/17/2020

Balance Amount: $721

Amount Past Due: $721

Date of last Payment: 6/2020

Actual Payment Amount: $2885

---

@Anonymous wrote:
I would not expect a PFD from Barclays. I would expect they will report accurately and if they do not you have to deal with it there’s no way to prevent it.

---

Date of 1st Delinquency: 09/2017

Charge Off Amount:  $2879 - What the hell?  It was previously charged off for $3606...how can they now say the charge off was 2879?

Date Closed: 11/2017

Status:  Charge Off

Additional Information:  Charged Off Account

Account History with Status Codes is showing "L" (Charge Off) from March 2018 to June 2020

And just for historical reference, the 5/20 Historical account info before the settlement:

Balance:  3606

Date of Last Payment: 8/2017

Credit Limit: 3000

Amount Past Due:  3606

Activity Designator: Closed

Additional Info:  Charged Off Account - Account Closed By Credit Grantor

---

@Anonymous There is no provision requiring a furnisher/creditor to re-investigate or perform a direct dispute after you have already exercised your right to a dispute via the CRA regarding the same issue.

Hindsight is 20/20, but what you should've done is submitted your dispute with documentation, handwritten, certified mail return receipt requested. Remember that for next time. 

At this point in my opinion, you should submit a MOV (method of verification) letter to the CRA's that did not correct the information. This requests the specifics of how they performed the investigation. I would then take all of that information along with your documentation proving the settlement and submit a complaint to the CFPB. 

https://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/FCRA-623-a-8-right-to-dispute-directly-with-...

As for the Barclays, you did not give me all the same information. What is the current balance? Does it state chargeoff, settled for less? Because if they settled for less, they did chargeoff a certain amount and that may be stated in the remarks I believe; it just cannot show as a current balance and it must show paid, settled for less. 

[TheKid2]

My experience with settling COs has been that the month after I settled, the TLs were updated to indicate my last payment and still retained the balance as past due (essentially what was left over from my last payment). The NEXT reporting cycle (next month), the TLs were updated with settlement remarks and the balance/past due was updated to $0. Seeing as you just settled these last month it is possible they are still making their way through the process and will be updated to $0 balance when they finally process the actual settlement - as of now they just processed the last PAYMENT. This could explain why they keep coming back "verified".

In short, for me it took TWO reporting cycles or TWO months from my last payment for the CRs to update to setlled / $0 balance.

In the future, would definitely recommend against doing online disputes.

[Anonymous]

Yeah that’s a good catch @TheKid2 , that’s very true, OP may not have given it time to update; two cycles is customary.

[Anonymous]

Thanks for the info y'all!  Sounds like patience is a virtue I need in this game lol.

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@Anonymous wrote:
Yeah that’s a good catch @TheKid2 , that’s very true, OP may not have given it time to update; two cycles is customary.

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[Anonymous]

But if it doesn’t update, you know what to do!