Debt-Collector Traps: Re-aging Debts on Credit Reports

Debt collectors (includes debt buyers) often furnish information to the credit bureaus. Below are two re-aging tactics to watch out for. Re-aging is when the collector misrepresents the time you actually defaulted to a later time. Re-aging extends the seven-year period in which the delinquency must be removed.

  • Debt collectors commonly report the date they received the account or assignment from the creditor as the initial date of delinquency, even though the real delinquency could be years earlier.
  • Debt collectors may report a new date of last activity if the consumer acknowledges the debt or even inquires about it.

What should you do?

If you suspect that a debt collector has unlawfully re-aged an old delinquency, dispute it immediately (online or through traceable mailing). The debt collector's insufficient investigation and/or verification of the obsolete debt can trigger liability under the Fair Credit Reporting Act and under the Fair Debt Collection Practices Act.

Applicable violations under the Fair Debt Collection Practices Act (you need not dispute first, as would be required under the Fair Credit Reporting Act) include:

  1. Communicating information to a credit bureau information known or should be known to be false;
  2. Making a false representation about the character, status or amount of the debt.
  3. Threatening to furnish obsolete information to the credit bureaus. We've sued debt collectors for even implying a right to furnish obsolete information.
  4. Reporting any negative information to a credit bureau during the period in which a consumer lawfully demanded validation of the debt.

Check your credit reports (annualcreditreport.com), and contact us. We've held plenty of debt collectors responsible for this type of credit-reporting misconduct.

A 2013 blog discusses the issue of what date of delinquency a debt buyer must use when purchasing an account. Reasonable procedures to ascertain that date are required.

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