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E-Oscar
The consumer Data Industry Association
(CDIA), in cooperation with Equifax, Experian, Innovis and TransUnion,
formed E-OSCAR (Online Solution for Complete and Accurate
Reporting). The system is an online mechanism for data furnishers
and credit bureaus to process out of
cycle updates on consumer disputes.
Junk Debt
Buyers
Junk
Debt Buyers are collection agencies that purchase bad debt -
they work for themselves as the now "own the debt". Junk debt
buyers are subject to Fair Debt Practices Collection Act like
regular collection agencies because the debt was in default
when they purchased it. Junk debt buyers are multi-billion
dollar industry and are responsible for a large number of debt
collection and credit reporting violations of law. Sellers of
junk debt include cell phone companies, utilities, medical
companies, card issuers, and many other types of business.
Junk debt buyers will immediately sting a
consumer's credit report on order to force a settlement, often
misrepresenting the debt as more recent than it really is.
Another tactic is to report the debt as revolving, which is
not only inaccurate, but also causes the score for further
decrease since the utilization factor calculates higher it
should. If the consumer goes along and settles the debt, this
has the perverse impact of causing the credit score to plummet
even further, since activity has been updated to the current
time period...
Credit bureaus cooperate with junk debt buyers
to sell them their prescreened credit offer lists of names for
comparison to their bad debt accounts. Junk debt collection is
a settlement-driven business and the consumer is brought to
the table by aggressive and often illegal credit reporting
tactics, often is contravention of the Fair Credit Reporting
Act and Fair Debt Collection Practice Act. There have been a
few high-profiles FTC actions against abusive junk debt buyers
who prey upon consumers to collect expired debts that they
know don't belong to a consumer.
Types of Act
Violations:
- Re-aging accounts to attempt to force
settlement on "time barred" (out of statue accounts). The
actual date that the debt becomes delinquent is supposed to be
reported under FCRA. Re-aging is the practice of reporting a
bad debt account as more recently than it really is. Re-aging
causes the FICO score to drop dramatically since the scoring
model interprets the re-age as more recent default. Junk debt
buyers press for payment of some amount to bring the debt back
under the statue of limitations, after which they can sue you
and have a chance of winning.
- Misreporting the legal status (open
charge-off that was actually discharged in bankruptcy)
- Misreporting the "open date" of last
activity on an account
- Various state Penal Code violations
(California consumers must be notified if their calls are
being monitored and recorded.)
- Multiple listings of the same debt. Junk
debt buyers are often responsible for multiple reporting of
the same debt as these change hands among buyers and sellers.
- Creditors pretending to be lawyers.
It does not improve you credit score to settle
an old debt unless the item is completely deleted from your
credit report (not just reported as "paid in full"). It makes
the situation worse since the delinquency / charge off will
now be reported as more recent! Or, if it is in your best
interest to settle, the second best option is to if the
collector agrees NOT to update the credit report at all. Ger
all agreements in writing.
What to
do:
-Don't assume you are
wrong - assume instead that your rights are being violated
- Keep all letters, account statements, and
court records (even from years ago)
- Do not provide the collection agency / junk
debt buyer with updated personal information. Never
acknowledge a debt with a collector or agree to any payment
until the agency validates the debt. Past billing statements
are not proof.
- Don't accept credit card offers that come
with an offer for settlement or request a payment in any other
way.
- Contact an attorney who specializes in
lawsuits for FCRA and FDCPA violations.
- Do not submit a "100 word statement" of
explanation regarding a JDB to the credit bureaus as these may
server to validate what is in the report, which could be
inaccurate or incomplete.
- Mail
everything certified mail, return receipt requested.
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