How to respond to collection letter on charged-off First Premier account

[Anonymous]

So I've been trying to rebuild my credit score in the hopes of getting a mortgage at some point and yesterday, out of the blue, I get a letter from a collection agency trying to collect on a First Premier card that was charged off more than two and a half years ago. Not sure what prompted them to send me a letter now, but I checked my credit reports a week or so ago and there was no collection activity by this company. My question is whether this company can add a new collection to my report on an account that's years old and has been charged off by the original creditor, or are they bottom feeders hoping to collect on a debt they bought for pennies on the dollar? Or both? What's the best way to handle this?

[kilroy8]

I would advise you to contact them settle this ASAP. The shortest statute of limitations on these things that I know of is 4 years. There are groups that invest in hundreds of these old debts who quickly funnel them to lawyers, who take you to small claims, hope you don't show up so they get a default judgement, and then take money from your paycheck. Usually a lot more money than the original debt. I have seen it happen to a lot of my friends and family.

[RobertEG]

They can report their collection at any time providing they are not under any cease collection bar, so yes, they can report.

A reported collection is excluded from your credit report based only on the reported DOFD.  The statute of limitations on the debt is not relevant to credit report exclusion.

More specifically, a debt collector is required to provide the DOFD on the OC account that created the debt to the CRA no later than 90 days after reporting of their collection.  FCRA 623(a)(5).

The CRA then uses the reported DOFD, and not other date, to determine whether any reported collection is excluded from credit reports they issue.  The exclusion period is no later than 7 years plus 180 days from the reported DOFD.

You can send the debt collector a DV request if you contest the debt.

If the DV is sent within 30 days after their collection notice, it will impose an automatic cease collection bar, which can be used to temporarily prevent their reporting of the collection.  However, they can send validation at any time, and then immediately report their collection, so a DV to prevent credit reporting can easily be overcome if the debt is valid.

You can choose to make a pay for not reporting offer to the debt collector, which, if accepted, will both discharge the debt and preclude reporting of the collection.

[Anonymous]

Not sure if this matters, but the name of the debt collector is Dynamic Recovery Solutiond