Yes they can. To avoid things like this in the future you need to have the OC recall the debt before paying. Once recalled it can't be reported by the CA. All the CA is doing is updating status of their account.
@TortyJaneIf you can prove that the CA listed themselves after the date you paid the OC. That may be in your favor. Is it 100%? Maybe, maybe not. If the date the CA placed themselves on your credit report was after payment. You could dispute that the CA listed themselves on a paid account to the CRA's. Sticky point is did the OC sell the account to the CA. Call and ask the OC of they still owned the debt when you paid.
@TortyJane wrote:Okay while that makes sense, what if the collection appeared right after or about the same time that the payment was made? I'm in a similar bind. I paid a bill to an insurance company, the creditor, directly. A few days later, I noticed a new collection account. I called the original creditor and they confirmed they (the OC) owned the account and that it was paid. I called the CA and they confirmed it was paid but nothing changed nor would they remove it. So I disputed it... they changed the notes on my CR to paid, but there's a single month showing it as a collection. Just one month... but it's still hitting as a collection for no good reason.
Now what?
You're misunderstanding ownership in this situation. Many non-lenders, like utilities, retain ownership of the debt but hire a collection agency to recover funds. My response above still applies. The oc needed to recall that debt before payment was made. Since the CA was assigned prior to you paying they're simply reporting the current account status. There's nothing erroneous. It's just one of those situations where how are you supposed to know if you didn't know. Since the CA is refusing to remove, continuing to dispute will cause the derogatory to "refresh". Basically, every time it's updated as correct, you'll be dinged for a new recent derogatory. The only thing you can do is launch a goodwill campaign and bug them until they decide to remove it.
@FireMedic1 wrote:@TortyJaneIf you can prove that the CA listed themselves after the date you paid the OC. That may be in your favor. Is it 100%? Maybe, maybe not. If the date the CA placed themselves on your credit report was after payment. You could dispute that the CA listed themselves on a paid account to the CRA's. Sticky point is did the OC sell the account to the CA. Call and ask the OC of they still owned the debt when you paid.
Date of reporting has no impact on whether the CA had authority to collect. All they have to show is when they received the contract versus when the debt was paid. If they were contracted prior to payment the reported collection is legitimate.