Junk Debt Buyers & Their Games

Shauna asks:  Can a collection agency re-report from an account that was included in a bk after the bk reporting period has expired?

Shauna,

I almost fell out of my chair when I read your question.  The audacity of junk debt buyers never ceases to amaze me.  The FCRA statutory reporting period for a Chapter 7 Bankruptcy is 10 years, but the individual debts associated with the bankruptcy disappear from your report after seven years. 

Springboard’s May 21, 2006 letter to the FDIC states: “Junk debt collecting is a settlement driven business model and the consumer is brought to the table by aggressive and often illegal credit reporting tactics.  These tactics include failure to report the original creditor, the original open date and the date of last activity.  These tactics can extend the reporting of the collection”.  The letter continues by noting that: “Recent years have seen the proliferation of junk debt buyers who prey upon consumers to collect expired debts or even debts that don’t belong to the consumer.  Their method of collecting has as its primary strategy the tactic of immediately stinging the credit report in order to force a settlement, often misrepresenting the debt as more recent than it really is and/or reporting the debt as revolving, which is inaccurate and which causes the score to decrease since the “utilization factor” calculates higher than it should.  If the consumer goes along and settles the debt this has the perverse impact of causing the credit score to plummet further (since activity has been updated to the current period).”

I’d like to recognize and thank Dianne L. Wilkman of Springboard Nonprofit Consumer Credit Management for her most excellent letter. 

Paul