FCRA violation or no? Do I have grounds for further complaints?

[Anonymous]

Backstory: I have three chargeoffs with my old credit union that all happened at the same time in 2017. In short, I paid them in full last year (June 30th 2020) because the utilization and monthly updates were suppressing my scores badly.

The credit union had June, July, and August of 2020 with CO designations still, even though the payment was in June. I disputed it, stating and sending the proof of payment on June 30th, 2020 and it came back verified, on top of that, they have added two new CO reporting entries for Feb and March 2021 even though the accounts were paid off and at a $0 balance since last year (all 3 bureaus).

What's my best step if I'm interested in pursuing this further, and is this an FCRA violation for them to report a "CO" designation for the last two months, even though it was paid off in full last year, and furthermore is it a violation for them to have confirmed/verified the disputed information for July/August that states "CO" even though the accounts were paid in June?

Thanks so much for any advice.

Edit: For the record, since they're paid off, I'm willing to send an ITS and follow through if need be if they don't correct the information, especially if it gives me leverage towards an outcome of them removing them. I thought there was a statute that if they verify false information and I can prove it, that the accounts must be updated or removed immediately. They've failed to update them over two disputes now, so it seems the CRA is left with the option of removal if they don't correct the mistakes of the OC.

[RobertEG]

Exactly how is the charge-off now being reported?

Can you post a screen shot?

[Anonymous]

I can't post images yet directly to the post apparently so here's a link with the acct number blocked out: https://imgur.com/bhIrf3c

All four accounts report exactly this way, except on Equifax they say August 2020 was "CO" also (it wasn't, clearly). Previous to the last dispute, the 2021 data was just simply "No Data". The full reports I pulled today match the image above.

[House2021]

What does ITS stand for? I just had an issue with a credit union that did a FCRA violation after I had disputed the amount, they did monthly statements that clearly showed a different amount of the charge off than claimed and had a wrong date for DOFD by a few months,. I emailed the head of that department and filed a dispute with the Better Business Bureau which the credit union is a member of. For my desired resolution, I asked that they remove the account in entirety from my credit report, not only did they remove it,  but they also pulled the collection account from the collection agency that I assigned it to and so I got both completely deleted (thousands of dollars), and that was without me ever paying it. I would try to file a BBB dispute and if that doesn't work file a dispute with the CFPB. 

[Anonymous]

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@Anonymous wrote:

I can't post images yet directly to the post apparently so here's a link with the acct number blocked out: https://imgur.com/bhIrf3c

All four accounts report exactly this way, except on Equifax they say August 2020 was "CO" also (it wasn't, clearly). Previous to the last dispute, the 2021 data was just simply "No Data". The full reports I pulled today match the image above.

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When you dispute, they update the account if it is not deleted.

Once a CO, always a CO. You cannot be CO'd more than once on an account.

Your dispute cause an update and they will uodate the month you disputed with CO. This is a score killer if it has been awhile.

Now, when you pay a CO (did you say you settled?), creditors usually do a few updates before they stop reporting monthly. First they have to make sure the payment is free and clear and not going to be cancelled or something else, that may have crossed over to another month reporting CO (which again, it is no matter what you do), they they update the balance the following month (another CO mark), and then finally update the balance to $0 (another CO mark).

Has you left the reporting alone, it would have been fine. How they reported is not incorrect. Like I said above you can only be CO once and it never becomes a positive account, even when paid. They did not add additional lates, that could have been different.

So, I do not believe there is anything to update, and it will not be deleted based on the correct "CO" reporting.

[RobertEG]

They can report CO as the current account status, or CO as the prior monthly status, for any month in which the account was both delinquent and also subject to a chrge-off at any prior time.  Reporting as CO for a given month is thus not a reporting of a new or subsequent CO in that month, but rather a reporting of delinquency status for that month.

However, once a delinquent debt is paid, in whole or by their acceptance of a settlement for less, the debt is no longer delinquent, and thereafter the current status must be a non-delinquency status of paid, or paid, settled for less.

If the debt was settled in June 2020, then no month thereafter can accurately report a continued delinquency status, such as either 180+ late or CO.  If you can clearly establish that a status, either current or under prior month's payment history profile, was reported as CO for any month after June 2020, that reporting is factually inaccurate.  

As to whether it is a violation per se of the FCRA, reporting of inaccurate information is not an actual violation unless it can be shown that the reporting was done with knowledge of its actual inaccuracy.  Inaccuracy is an inevitable human trait.  The governing statute is FCRA 623(a)(2), which states that it is a violation to report knowingly inaccurate information.

Yes, you can file a dispute challenging the accuracy of the reporting, and the furnisher can correct if they agree without any strict violation of the FCRA.

You cannot, however, file private civil action directly seeking damages for inaccurate reporting, even if you can show that it was knowingly inaccurate, so while knowingly reporting inaccurate information is a violation of FCRA 623(a)(2), it does not immediately subject the reporting party to civil damages.  FCRA 623(c) explicitly exempts all reporting to a CRA from private civil action.

The purpose behing that exemption in the FCRA is to avoid a string disincentive for voluntary reporting of account information to CRAs over concerns for consumers filing lawsuits seeking damages.

To obtain damages, you must first file a formal dispute with the CRA making the furnisher aware of the inaccuracy.  If, based on their required investigation of the dispute, the furnisher then verifies the accuracy, that investigation can then be subject to civil action as being unreasonable.  Stated simply, you must first file a dispute and obtain a finding of verification of accuracy before you can seek civil damages on the basis of inaccurate reporting.

[Anonymous]

It is still a CO even if you have paid it.  It is now just a paid CO.  They will still list the account as having been charged off back in 2017 but since paid.  The best thing you can do is to try to send the lender a goodwill letter to get the CO removed, but that is completely up to them.  They have every right to still list the accounts as CO until the 7 years are up on them.

[RobertEG]

CO can be used, under the reporting guidelines of the big-s CRAs as set forth in their common credit reporting manual, the Credit Reporting Resource Guide, as a designation for the monthly delinquency status of a delinquent debt.

Yes, once a CO has been taken, that fact remains and is not removed based on return of the account to paid or pays as agreed status.

Thus, any month prior to end of delinquency status can be reported as CO, and remains after payment of the debt.

However, after payment of the debt, the account is no longer under any delinquency status, and thus reporting as CO as either the continued current status or as the status under payment history profile for any prior month after the debt is paid is inaccurate.

A wrinkle in that reporting of a CO once paid is that the Credit Reporting Resource Guide explicitly permits a creditor include the special comment of "was a CO" when reporting a paid (non-delinquency) status.  To that extent, a consumer cannot prevent continued statement in their credit report that the debt was, at some prior point, subject to a CO..

However, it they simply report current as delinquent, such as by reporting CO only, that is inaccurate and can be disputed.

The distinction is thus one of reporting the actual status as remaining delinquent vs reporting the actual status as paid with the special comment of "was a CO".  The former is improper, while the later is permissbible.