Someone reminded me on this subject tonight, so I thought I would come here and share information on the topic of Skip Tracing.
Consumers using opt-out to try to skit the collection agencies - I want to disagree with this tactic.
Pre-solicitation is when a creditor asks the credit reporting agency for a mailing list, and they set criteria like a specific zip code, they may even ask for a group of people falling under a certain score range, and they may even ask the credit reporting agency to find all consumers they know to own a home. That is how people get them refinance offers iin the mail.
Well my point is I really don't think collection agencies can benefit from this, it is too general, I don't think the credit reporting agency is going to hunt down consumers just by their social security number and such. And if the collection agency set parameters like say a bank would to obtain a mailing list it is going to pull in more people then what the collection agency is trying to get.
My point really is that the collection agencies have access to other products:
Social Search - if the collection agency types in the consumers social security number this will pull up all known addresses on the consumer, the date the addresses were reported, the name of the company that reported it, and the contact address & number for that reporting company.
There is also Subscriber can not locate tag. This usually shows on the creditor / collection agencies obtained reports as SCNL - this means that any new creditors pulling reports on this person see the tag, they are expected to immediately call that company looking for the consumer and report their new address they used to apply with them.
Another thing if the collection agency does not want to wait on a creditor to call them with this information, they can tell the credit reporting agencies to just send them an e-mail notification as soon as a new address gets reported to the credit report.
It is a good idea if you have debt you can not pay, and you are trying to wait out the statute of limitations to try to avoid getting sued, the only thing you have to do to stay hidden is "Don't pull your credit report or apply for new credit" until you are outside that SOL.
I have mixed feelings about the credit reporting agencies, my biggest problem is that they let creditors or collection agencies report things on your report with out any input from the consumer.
My big issue is that credit affects so much of your life and I think that especially when a negative item is reported there should be more stringent rules to follow, there should be some type of verification process before it can be listed and ruin a persons life or put one heck of a fight on there hands.
Original creditors, okay, they should be able to list negatives with no problem but some of the collectors or junk debt collectors should not be able to multiple list. One report from the original creditor will stay on your report for 7 to 10 years anyway, so why have the additional reporters???
I use to work for a credit bureau where the owner also happened to own a collection agency. That is no longer legal, he eventually had to sell the collection agency. But he did explain to me the rules for how the collection agency reporting works, I can understand how consumers can get confused, misled, or outright lied to when dealing with certain types of collection agencies.
Ok, here are the abbreviation I am going to use and want to make sure anyone reading knows what they are:
OC - Original Creditor
CA - Collection Agency
CRA - Credit Reporting Agency
1. If an OC owns an account, they can assign the account to a CA. In this case both OC & CA can report the account to the CRA.
* If for some reason the OC recalls the account from a CA, then when they return the account - they the CA are obligated to remove the data off of the consumers credit report.
* If the OC assigns a new CA the account, they can pick up where the 1st collection agency left off.
2. If an OC sells an account to a CA, then the OC has to update closed / transferred. And the new CA picks up reporting on the account.
* Here is where the mess really gets started. Say the 1st CA assigns the debt to a 2nd CA - then both CA1 & CA2 get to report the data.
* If CA1 recalls the debt from CA2 - then the 2nd CA has to remove their reporting.
* Then there is the case where CA1 sells the debt to another CA. Then the 1st CA must update the credit report to show closed / transferred. And the new CA gets to start reporting data to the consumer credit report.
Now commonly if a consumer disputes with a collection agency they might just transfer the debt to a new collection agency on purpose to avoid validating the debt. They know if they sell to another collection agency - they just did that much more damage to your credit rating.
So when a debt is assigned, it is still tied to the OC and can be removed, if you can convince the OC to recall the debt.
But as long as collection agencies own and sell the account, they can forever be populating the consumer credit file with duplicates of the same account listing.
I really messes up consumer applications for mortgage loans, because a loan officer is required to order a RMCR - Residential Mortgage Credit Report. That means my job was to call ALL of the collection agencies reporting on the account to figure out who exactly owned the account and get the up to date balance.
A lot of times, assigned debt does not get removed just because the OC recalled the debt. And the mortgage companies know this, so they have to call all of them to figure it out.
This is a problem, because if a consumer applied for a mortgage when they had collections - their application resulted in the collection agency being woken up, and alerted to the mortgage and running to the mortgage company with their hand out waiting to get paid.
Usually when I verified accounts and found a collection agency to no longer hold an assigned account, I automatically informed them that it was their duty to update the credit reporting agency to immediately remove said account.
There is language in the Fair Credit Reporting Act allowing consumers to sue companies for willful noncompliance in their reporting.
The hard part, is finding out which collection agencies are assigned verses sold account. You think they are going to volunteer that information, yeah right. When hell freezes over.
All collection agencies sold to or assigned the debt, must remove after the original creditor account expires in 7 years.
Another problem, is the collection companies sneak the data on the credit report without giving the credit reporting agency the original default date - so the credit reporting agency knows when to expire the account off of the consumer credit report.
This information is not always viewable on consumer credit reports to tip the consumer off to this outright violation! You need to call the credit reporting agency if you suspect that the expiration date is wrong and report abusive collection agencies and demand removal for the violation.
In addition, you can send an intent to sue letter to the collection agency notifying them that you are aware of their illegal actions, and demand them pay you a fine or see you in court. Often collection agencies will comply and pay you the fine.
Hope this helps. Sorry if I got a little confusing, it is like a tongue twister trying to say all of that.
Nightstar
Good post.