CA told me to ask OC for PFD, am I doing this right?

[Anonymous]

Background:

I have a medical bills that has been in collections a little over a year. I have been making monthly payments the entire time, I owe about $1500 now. I not have the ability to pay it off. The CA has reported it on my CR but the OC has not.

I called the CA to see about the option for a PFD. He said they weren't able to do that unless directed by the OC. He initially suggested paying it then a good will letter, but I asked if he thought it was worth contacting the OC about a PFD and he said it couldn't hurt.

So: what I'm asking for is for the OC to contact the CA and tell them to remove the collection from the report right? Should I get this in writing from the OC? It is still possible to have them say that then have the CA say no right? Anything else I should be doing here? FWIW The CA is a small company, not one of the big ones. 

[Anonymous]

What the CA is basically telling you is he (they) doesn't have the authority from the OC to grant PFD.

He's telling you (not directly, of course) to have the OC recall the debt and then negotiate with them for PFD.

This may or may not work, but the current CA has no input on it.

If the OC pulls the file back from them, they cannot refuse to let it go, at least not under most agreements between collectors and creditors that I've ever seen.

If the OC pulls the file back from them, they are of course free to reassign it at any time, whether back to the current CA or to another one.

If the OC pulls the file back from them, the OC could agree to accept PIF on the remaining balance in exchange for deleting the reporting on your credit file - this is not an obligation, and is entirely dependent on the policies and practices of the lender in question.  Many refuse to do so, some will entertain the idea, some will just do it to expedite payoff.  Each lender has its own policies on this, and it is not governed by any regulations because it is technically not supposed to happen, ever.

So, in your case, what should happen?

First, you need to contact the OC to see if they are willing to recall the debt to negotiate on it.  

If they do so, then you need to try to get them to agree to PFD.  Some may be willing to accept payments, some will require a one-time payoff.

If they agree, that is when you need it in writing, just in case they neglect to do the "delete" part after you do the "pay" part.

The goodwill letter course can be done with either the current CA or the OC - or both - to get lates removed without deleting the entire tradeline.

Again, results are up to the whim and/or policies of the CA and the OC involved, but it just costs your time and maybe a couple of stamps to try it.

[Anonymous]

Thanks, that confirms what I was thinking. My only question is, since the OC did not report to the credit bureaus, I am asking the OC to ask the CA to remove the report, right? So that's the part I want to get in writing? There are no lates showing anywhere, just one report for the CA showing the original amount owed and the current amount owed (about 60% of the original).

[Anonymous]

Essentially you are asking the OC to take back the account and the CA would no longer report the account as they would no longer be allowed to collect on it.

If the OC says no, I would google the Why Chat HIPAA process and start with that.

[Anonymous]

No longer reporting isn't the same as deleting though right? The OC would have to ask the CA to delete it? Or at least approve for them to delete it, based on what he said.

[Anonymous]

The "current" collector is the one who is allowed to report an active collection.

If a debt is charged off by an OC and sent to a collector, it will appear twice - once for the original account (charged off) and once as a collection (the active collection by the CA).  If a CA no longer has the authority to pursue collection on a debt, they can no longer report it as a collection by them.  So in cases where the OC recalls the debt (as you want them to do in your case), the CA loses their authority and their ability to report their collection on the account.  The OC retains their ability to report the original charge-off, though, which is what you want them to ultimately remove (delete).  

[RobertEG]

There are two possibilities.

One will require deletion of the collection, the other wont.

If the OC terminates the collection authority granted to the debt collector, that alone is basis for then contacting the CRA and getting the collection deleted.

You would only need evidence that the debt collector no longer has collection authority.  No consent would be needed from either party to have the collection deleted.

CRA policy mandates deletion of a collection if the debt collector's authority is terminated by the creditor.

Alternately, they are apparently suggesting that if the creditor notifies them that they (the creditor) consents to deletion, then the debt collector will abide by that recommendation and delete.  That is entirely voluntary on the part of the debt collector.  Having a statement from the creditor that they consent to deletion of reporting that is not theirs would have no value in requiring deletion, as it would still be the voluntary choice of the debt collector.

I highly doubt that the debt collector is suggesting option 1, which is a termination of their business.

They appear to be suggesting option 2, which is a totally voluntary deletion scenario.

[RonM21]

Either one, if agreed upon, should get you the result you are looking for. Just remember, as you know, they may say no. But it is worth a shot.