Correct me if I'm wrong,but for what I can understand is that PFDs are in a way illegal?
illegal = against the law. There is no law stating that lenders are required to report to the CRAs.
The way Ive argued it is that their contracts and federal laws require them to report accurate information. There is no obligation to report. Think of it this way. You as a citizen have the right (in most states) to perform a citizen's arrest when you witness a person perform an illegal act. If you do make the arrest, you better be sure that the information you based your arrest on is correct and accurate. However, while this is something you can do you are not under any obligation to perform a citizen's arrest if you witness a crime. Additionally, you are under no legal obligation to report the crime (as long as your not aiding and abetting).
CA's and OC have the legal duty to report accurate information. If they elect to not report then that is fine.
The "prohibition" against the deletion of information based on payment of a debt is stated in both the CRA reporting manuals and in reporting agreements, but is a statement of policy on their part. No CRA has ever, to my knowledge, enforced such a request for deletion as being a breach of contract by the furnisher.
They could, if they were aware of it, terminate a reporting agreement, but again, I know of no such instance.
The CRA policy is, for all intents and purposes, merely an instruction. Furnishers, when reporting a deletion, are not required to provide a reason.
The issue just does not arise.