Original creditors will often continue reporting an account delinquent after they have sold the account to a collection agency.
If an account is considered to be “Charged-Off” the original creditor has most likely used this account as a “write-off” against their income for tax purposes.
These accounts are then sold for a percentage of the debt owed to collection agencies for further collection efforts. If the creditor is no longer the owner of the debt, and they report the account as late- this would be obvious reporting of inaccurate data.
If there is no longer a scheduled payment due and payable to the original creditor, the account should not be reporting late.
This issue has been debated amongst industry professionals and the law. I have found the best method for removal of the late payments after charge off to be disputing each individual reported late date.
Utilizing a letter that contains specific verbiage similar to the following would be advisable:
This account XXXX was not owned by XXX on xx/xx this account should not be considered late on 04/05, 05/05, 06/05 etc. Please prove that this account was in fact able due for a payment on those dates, and prove that the owner of the account had legal right to collect payments for those alleged late dates.
This tactic can be used in conjunction with a FDBA tactic for optimum results.
