A debt collector is, by definition, almost always a third-party with whom the consumer has not entered into any type of agreement.
A collection is the reporting by a party that they have obtained authority to attempt to collect on a debt of another.
There is no inaccuracy in the reporting of a collection based on any issue of lack of an agreement between the consumer and the debt collector, and thus no basis for a dispute due to lack of any ageements with the consumer.
Whenever a debt currently has or previously had collection authority, they can report their collection.
Neither the FDCPA nor the FCRA requires a debt collector to delete their collection if/when their collection authority is terminated.
Collection authority can be termined by the owner if the collection authority is only assigned, or it is automatically terminated when either the debt is paid, or it the debt collector owns the debt, they sell it to another.
However, the CRAs have a policy, as set forth in the credit reporting manual, that if a debt collector has their collection authority terminated prior to discharge of the debt, they are to delete their reported collection. That policy is intended to prevent two collections from simultaneously reporting on the same debt.
On the flip side, however, the CRAs also have a policy that a debt collector is NOT to delete their collection based on payment of the debt.
Thus, if the debt is paid prior to termination of a debt collector's collection authority, such as by direct payment to the OC, the debt collector is not to delete their collection.
The OC must voluntarily terminate their assigned collection authority prior to acceptance of payment. In that situation, the basis for requesting deletion of the collection is purely based on CRA policy instructions, and not any statutory requirment.
