Background: I had posted earlier that I had a Sync CareCredit account that was charged off with a balance of 891. I wanted to pay it off this past month so that it would quit updating on my CR and show a zero balance. Shen I called Synchrony, they told me that they couldn't take my payment. Literally, that same day, I went to my mail and there was a 1099-C.
I raised disputes with the CRA because they stated my last payment was 2018. It was 2017. I also filed a complaint with CFPB.
Shortly after I filed the CFPB complaint, I got an email from the executive office of Synchrony and I called and the woman indicated that she had referred the matter to collections. I stated that I still wanted to resolve the debt and asked if I did that, would the credit reports be updated to show a zero balance... (I said I understood that it would still show as charge-off). She said she didn't know and I never heard back.
Got the response from CFPB today and is shown below (bolding is mine):
Question 1: The letter seems to imply that if I made payment, it would be acceptable and non-refundable. If I did that, does that mean they would need to update the balance owed as 0?
Question 2: The letter states that Synchrony "last reported in December, 2017". However, all my CRs indicate "last updated 10/2020". In addition, the following information is shown on my myfico credit report:
How do I resolve that discrepency? Am I just out of luck until this falls off my credit reports?
I know this is long but appreciate any advice or wisdom.
CFPB response from Synchrony:
Your account was opened on April 5, 2015. Unfortunately, despite our attempts to collect on the outstanding balance on this account, we did not receive a payment after July 24, 2017. Therefore, due to non-payment, the remaining balance on your account of $921.18 was charged off as a loss on December 26, 2017. On January 3, 2018, a settlement offer was offered to you, we only received one payment of $100.00 on January 19, 2018.
On January 28, 2021, a 1099-C was mailed to you in the amount of $191.59. The reason the balance is lower than the charged off amount is because we only report the Principal portion of the Total Balance on the 1099-C. Upon our review, we found no error in the issuing of the 1099-C, we only issue a corrected 1099-C if it were was a bank error. I sincerely regret any inconvenience or frustration this matter may have caused you.
When a creditor discharges a debt, either by ceasing collection efforts or by settling for less than full consideration, under Internal Revenue Code Section 6050P and the regulations thereunder, subject to certain exceptions we have determined to be inapplicable to you, the creditor is required to issue IRS Form 1099 if the debt forgiven is equal to or greater than $600.00. Under current regulations, the principal amount of the debt forgiven is required to be reported by the creditor to the IRS and to the debtor even if the principal is less than $600.00. Please contact your tax adviser concerning the particular U.S. Federal income tax consequences to you.
Please be advised, this letter is not an attempt to collect on a debt. Sending payments after the 1099 was issued does not alter the status of the account or the 1099. Any payment you choose to send is voluntary and non-refundable.
As required by the statute of limitations, Synchrony Bank is no longer pursuing collection activity on your account. The statute of limitations does not change our obligation to accurately report account history. Synchrony Bank last reported your account on December 28, 2017. As the account has been accurately reported, your request to alter the account reporting is respectfully declined.
Furthermore, we are obligated under the Fair Credit Reporting Act (FCRA) to provide truthful and accurate information to all credit bureaus. Please understand that Synchrony Bank is unable to alter this information.
Therefore, as we abided by the terms of your account, we must respectfully decline your request to delete the negative information listed on your credit report.
@designated_knitter wrote:Background: I had posted earlier that I had a Sync CareCredit account that was charged off with a balance of 891. I wanted to pay it off this past month so that it would quit updating on my CR and show a zero balance. Shen I called Synchrony, they told me that they couldn't take my payment. Literally, that same day, I went to my mail and there was a 1099-C.
I raised disputes with the CRA because they stated my last payment was 2018. It was 2017. I also filed a complaint with CFPB.
Shortly after I filed the CFPB complaint, I got an email from the executive office of Synchrony and I called and the woman indicated that she had referred the matter to collections. I stated that I still wanted to resolve the debt and asked if I did that, would the credit reports be updated to show a zero balance... (I said I understood that it would still show as charge-off). She said she didn't know and I never heard back.
Got the response from CFPB today and is shown below (bolding is mine):
Question 1: The letter seems to imply that if I made payment, it would be acceptable and non-refundable. If I did that, does that mean they would need to update the balance owed as 0?
Question 2: The letter states that Synchrony "last reported in December, 2017". However, all my CRs indicate "last updated 10/2020". In addition, the following information is shown on my myfico credit report:
How do I resolve that discrepency? Am I just out of luck until this falls off my credit reports?
I know this is long but appreciate any advice or wisdom.
CFPB response from Synchrony:
Your account was opened on April 5, 2015. Unfortunately, despite our attempts to collect on the outstanding balance on this account, we did not receive a payment after July 24, 2017. Therefore, due to non-payment, the remaining balance on your account of $921.18 was charged off as a loss on December 26, 2017. On January 3, 2018, a settlement offer was offered to you, we only received one payment of $100.00 on January 19, 2018.
On January 28, 2021, a 1099-C was mailed to you in the amount of $191.59. The reason the balance is lower than the charged off amount is because we only report the Principal portion of the Total Balance on the 1099-C. Upon our review, we found no error in the issuing of the 1099-C, we only issue a corrected 1099-C if it were was a bank error. I sincerely regret any inconvenience or frustration this matter may have caused you.
When a creditor discharges a debt, either by ceasing collection efforts or by settling for less than full consideration, under Internal Revenue Code Section 6050P and the regulations thereunder, subject to certain exceptions we have determined to be inapplicable to you, the creditor is required to issue IRS Form 1099 if the debt forgiven is equal to or greater than $600.00. Under current regulations, the principal amount of the debt forgiven is required to be reported by the creditor to the IRS and to the debtor even if the principal is less than $600.00. Please contact your tax adviser concerning the particular U.S. Federal income tax consequences to you.
Please be advised, this letter is not an attempt to collect on a debt. Sending payments after the 1099 was issued does not alter the status of the account or the 1099. Any payment you choose to send is voluntary and non-refundable.
As required by the statute of limitations, Synchrony Bank is no longer pursuing collection activity on your account. The statute of limitations does not change our obligation to accurately report account history. Synchrony Bank last reported your account on December 28, 2017. As the account has been accurately reported, your request to alter the account reporting is respectfully declined.
Furthermore, we are obligated under the Fair Credit Reporting Act (FCRA) to provide truthful and accurate information to all credit bureaus. Please understand that Synchrony Bank is unable to alter this information.
Therefore, as we abided by the terms of your account, we must respectfully decline your request to delete the negative information listed on your credit report.
You can only be "CO" once. So technically, when you dispute, and the item is not completely removed, they generally update the info. They could technically report "CO" this month. It is just nicer when they stop reporting on a regular basis for your scores.
The date for "last reported" or "last update" will be the month the dispute was investigated/resolved. This just came up in another thread. Disputing leads to heartache, in my experience. It has to be iron clad removal for me to dispute something, because the update alone can be very damaging.
Having a 1099C does not remove an item from your credit. You still owe it and it is still a CO.
If it did not change your DoFD, nothing is wrong with the reporting, you just got hit with a catch up penalty for the update and it does make it "look" more recent, but if it did not change your DoFD, nothing has really changed - they could report CO until ages off, but not now since they canceled the debt, unless it is forced with an update via disputing where the entire account is not removed. This is your doing by trying to fix something via disputing (whether it is a valid reason to dispute, you think it is a valid reason to dispute, or frivolous disputing in hopes of deletion) and the unfortunate consequences of it regardless of the basis for disputing.
I am surprised that since they canceled the debt and/or sold it, that it has not been updated to $0 that should be corrected, ut since they sent it collections, I would be on the look out for a CA cropping up. I would find out who they sent it to and try to incercept their reporting by settling/paying it.
It does sound like they verified that they last reported a payment in 2017, as none are reflected in your report you show, but the bureaus themselves change the last "update" date when they "update" the account. This is not the same thing as when Sync last reported a payment