The most frequently abused rule of the FDCPA and FCRA it would be collection agents re-aging debts.
If a collection agent re-ages a debt, there is a great chance you can have that removed.
So what is re-aging?
First, let's look at the definition of re-aging debts.
Definition: Creditors change the date that the debt went bad. Usually they like to report the date as the day they bought the debt from the original creditor. Obviously, if they bought the debt 6 months after it actually went bad, that is not fair to you since it moves the date it will be removed from your credit report up by 6 months.
How it should be reported: A debt is legally considered bad 30 days from the date of your last payment. For example; If your last payment was January 1st 2001 the debt will go bad approximately February 1st. 2001
This date is important because the statute of limitations begins from that date. Think about it, if a collection agent buys the debt 6 months later and dates it from that day, that's 6 months more its hurting your credit. It's also a violation of the FCRA and an opportunity for you to have it removed from your credit report all together.
How big of a violation is this on behalf of the debt collectors?
Here is a lawsuit by the FTC Themselves.
One of the nation's largest debt-collection firms will pay $1.5 million to settle Federal Trade Commission charges that it violated the Fair Credit Reporting Act (FCRA) by reporting inaccurate information about consumer accounts to credit bureaus. The civil penalty against Pennsylvania-based NCO Group, Inc. is the largest civil penalty ever obtained in a FCRA case.
For one reason or another, Collection Agents still have not learned to play by the rules. That's fine by us. Keep breaking the rules and educated consumers will keep using to their advantage.
Marc Chase is a Partner at My Credit Group Inc. – A nationally recognized authority on credit report repair and authors of “The official guide to credit repair & credit repair companies”