I agree that if they still own the debt, and only assigned collection authority to a debt collector, then you still have a delinquent balance each month, and they can continue to accurately report as such, as well as continued delinquencies, until the debt is either paid or sold.
They can choose to report delinquency status either as days delinquent (e.g., 150-late or 180-late), OR as CO if the debt has also been charged off. CO is a legit delinquency reporting status, either as the current status or as prior monthly payment history profile reporting.
As for an original creditor being exempt from any requirement to verify the debt, that is not correct PROVIDED you have filed a dispute under the FCRA.
While they can decline to verify in an informal request, if you file a formal dispute under the FCRA, the CRA must forward them a copy of the dispute, and the creditor must investigate and either verify the accuracy as reported, correct any finding of inaccuracy, or delete the inaccurate reporting.
Verification is made back to the CRA with whom the dispute is filed, and not directly to you, the consumer, unless you choose to file a direct dispute under FCRA 623(a)(8). Creditor response to a direct dispute is sent directly to the consumer, and not to the CRA.
