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Is PFD a violation of FACTA?


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15 replies to this topic

#1 jaided

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Posted 23 February 2012 - 12:52 PM

I think it's been argued by countless creditors and collection agencies that a PFD is not possible as it is "illegal", etc. I think it has also already been established on these boards and elsewhere that there is nothing illegal about it. I just heard an OC tell me that it would be a violation of FACTA and I doubt that's true.

Does anyone have a valid argument for me when confronted with the "PFD's are illegal" speech? I would think, if anything, they would be a violation of the FCRA section 623 for accuracy in reporting, but I'm not even seeing how that is the case. Isn't it true that once you pay an account, it is at that point that the listing becomes inaccurate because it reports a balance due and it reports as unpaid. Therefore, wouldn't that be an excellent opportunity for an OC to delete a TL to prevent repoting inaccurate information. Yes, they could just update the account with the more recent information ($0 balance, paid), but there's nothing saying that they HAVE to do that instead, correct??

If it helps, I'm dealing with an OC and not a CA and this is in regard to a CO.



#2 JunkBuyersWorstNightmare

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Posted 23 February 2012 - 01:25 PM

There is no legal requirement that an OC/CA/JDB has to report ANYTHING, only that what they do report is true and accurate.

#3 jaided

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Posted 23 February 2012 - 01:52 PM

There is no legal requirement that an OC/CA/JDB has to report ANYTHING, only that what they do report is true and accurate.


Yes, I totally get that. I get that it's not illegal in any way and you made your point very clearly. I guess I'm concerned that they will quote to me some sort of CRA guidelines/rules/regulations that prevent an OC/CA from deleting an account in return for payment. I remember hearing about something like this at some point, but can't find it. Is it true that they have their own regulations that prevent this practice, thus threatening the OC's ability to report to the CRAs if the OC is found in violation of this guideline??

#4 rslifkin

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Posted 23 February 2012 - 01:53 PM

I as well have had companies as well as Experian :rolleyes: tell me that things like PFD and removal of lates are "against the law" and "violations of accuracy." Wrote Sterling GW on Monday. Two addresses...

Anyways, it goes to show why I :aggressive: so hard and why I feel I have so much to prove and improve.

PFD can happen. All it takes is 1. Propgoowording/course of action and 2. A little GW on part of the OC. :good:

#5 rslifkin

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Posted 23 February 2012 - 01:56 PM


There is no legal requirement that an OC/CA/JDB has to report ANYTHING, only that what they do report is true and accurate.


Yes, I totally get that. I get that it's not illegal in any way and you made your point very clearly. I guess I'm concerned that they will quote to me some sort of CRA guidelines/rules/regulations that prevent an OC/CA from deleting an account in return for payment. I remember hearing about something like this at some point, but can't find it. Is it true that they have their own regulations that prevent this practice, thus threatening the OC's ability to report to the CRAs if the OC is found in violation of this guideline??



If it is true that they 1. Repory every incorrect thing that comes theirvway with NO fact-checking and 2. Then say said incorrect reporting is "up to their strict identity protection requirements" then, no, it isn't. They report anything that hits their computer.

They wont tell you this on the phone, though. :glare: and I get what you mean.. "What to do, or how to respond." Right?

#6 Link2k

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Posted 23 February 2012 - 02:02 PM


There is no legal requirement that an OC/CA/JDB has to report ANYTHING, only that what they do report is true and accurate.


Yes, I totally get that. I get that it's not illegal in any way and you made your point very clearly. I guess I'm concerned that they will quote to me some sort of CRA guidelines/rules/regulations that prevent an OC/CA from deleting an account in return for payment. I remember hearing about something like this at some point, but can't find it. Is it true that they have their own regulations that prevent this practice, thus threatening the OC's ability to report to the CRAs if the OC is found in violation of this guideline??


They will tell you they can't delete because the FCRA requires them to report accurately. Just tell them per Section 623 they aren't required to report anything and you are just asking them not to report anything as opposed to reporting incorrectly.

They'll probably still say no but at least they can't give you a bs reason and they just have to basiially say "we just don't want to help you"

#7 jaided

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Posted 23 February 2012 - 02:24 PM



There is no legal requirement that an OC/CA/JDB has to report ANYTHING, only that what they do report is true and accurate.


Yes, I totally get that. I get that it's not illegal in any way and you made your point very clearly. I guess I'm concerned that they will quote to me some sort of CRA guidelines/rules/regulations that prevent an OC/CA from deleting an account in return for payment. I remember hearing about something like this at some point, but can't find it. Is it true that they have their own regulations that prevent this practice, thus threatening the OC's ability to report to the CRAs if the OC is found in violation of this guideline??


They will tell you they can't delete because the FCRA requires them to report accurately. Just tell them per Section 623 they aren't required to report anything and you are just asking them not to report anything as opposed to reporting incorrectly.

They'll probably still say no but at least they can't give you a bs reason and they just have to basiially say "we just don't want to help you"


Yeah, I'm fully anticipating that it will eventually get to that point where they basically say "cause we said so" and then "the end." I mean, they can.

Does anyone have the verbage regarding the data furnishers responsibilities when they enter into a contract with the CRAs in terms of reporting?

#8 Gronnie

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Posted 23 February 2012 - 02:54 PM

The credit and collections industry made up a term "credit bartering." They will all insist that they aren't allowed to engage in "credit bartering."

#9 JunkBuyersWorstNightmare

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Posted 23 February 2012 - 03:08 PM

The credit and collections industry made up a term "credit bartering." They will all insist that they aren't allowed to engage in "credit bartering."


But that's all it is. A made-up term.

#10 Gronnie

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Posted 23 February 2012 - 03:21 PM


The credit and collections industry made up a term "credit bartering." They will all insist that they aren't allowed to engage in "credit bartering."


But that's all it is. A made-up term.


Yup, preaching to the choir.

#11 jaided

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Posted 23 February 2012 - 03:29 PM

Okay, this is the verbiage I was looking for re: CRA/Data Furnisher responsibilities:

DELETING ACCOUNTS/BORROWERS
17. Question: How can an account, or a specific borrower, be deleted from the consumer reporting agenciesí files?
Answer: It is imperative that only inaccurate accounts be deleted from the consumer reporting agenciesí files. In order to maintain the accuracy and integrity of consumer files, historical consumer credit information must be reported in a factual and objective manner. Paid derogatory accounts, such as collections, should be reported as paid; they should not be deleted.
To delete an entire account, for reasons other than fraud, report Account Status Code DA (Field 17A). All borrowers will be deleted along with the account history.
To delete an entire account, due to confirmed fraud, report Account Status Code DF (Field 17A). All borrowers will be deleted along with the account history.
To delete a specific borrower, report Z in the ECOA Code field of the segment containing the consumer to be deleted.
CREDIT REPORTING RESOURCE GUIDE | 6-9
Copyright 2006 © Consumer Data Industry Association


As you can see, this says that "only inaccurate accounts be deleted". My argument is that my unpaid account becomes inaccurate the very second they cash my check. Therefore, wouldn't this be the loophole needed in order for an OC to justify removal? I guess the answer is yes, but only if they want to. :glare:

#12 Kevin20

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Posted 23 February 2012 - 03:50 PM

Okay, this is the verbiage I was looking for re: CRA/Data Furnisher responsibilities:

DELETING ACCOUNTS/BORROWERS
17. Question: How can an account, or a specific borrower, be deleted from the consumer reporting agenciesí files?
Answer: It is imperative that only inaccurate accounts be deleted from the consumer reporting agenciesí files. In order to maintain the accuracy and integrity of consumer files, historical consumer credit information must be reported in a factual and objective manner. Paid derogatory accounts, such as collections, should be reported as paid; they should not be deleted.
To delete an entire account, for reasons other than fraud, report Account Status Code DA (Field 17A). All borrowers will be deleted along with the account history.
To delete an entire account, due to confirmed fraud, report Account Status Code DF (Field 17A). All borrowers will be deleted along with the account history.
To delete a specific borrower, report Z in the ECOA Code field of the segment containing the consumer to be deleted.
CREDIT REPORTING RESOURCE GUIDE | 6-9
Copyright 2006 © Consumer Data Industry Association


As you can see, this says that "only inaccurate accounts be deleted". My argument is that my unpaid account becomes inaccurate the very second they cash my check. Therefore, wouldn't this be the loophole needed in order for an OC to justify removal? I guess the answer is yes, but only if they want to. :glare:


Just speaking in terms of real world business operations -- doesn't surprise me that a CRA would have this sort of language in their contract or legal fine print for users. So what? It's a private contract, it's not statutory law. Have you even bothered to abide by a software EULA?

What's going to happen if a creditor happens to neglect this contractual obligation and drops your tradeline? Is Experian going to sue a creditor because they dropped your tradeline? Is Experian going to refuse to collect any more of their service fees in a huff and cut the creditor off?

I sincerely doubt it. The creditor sincerely doubts it. I haven't attempted a PFD myself. But if I ever do, my attitude will be: 1) No, it's not illegal, quit lying to me. 2) Is it maybe contrary to your contract? I don't give a crap. Do you want some money from me, or do you want zero money from me? Your choice.

#13 jaided

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Posted 23 February 2012 - 04:54 PM


Okay, this is the verbiage I was looking for re: CRA/Data Furnisher responsibilities:

DELETING ACCOUNTS/BORROWERS
17. Question: How can an account, or a specific borrower, be deleted from the consumer reporting agencies’ files?
Answer: It is imperative that only inaccurate accounts be deleted from the consumer reporting agencies’ files. In order to maintain the accuracy and integrity of consumer files, historical consumer credit information must be reported in a factual and objective manner. Paid derogatory accounts, such as collections, should be reported as paid; they should not be deleted.
To delete an entire account, for reasons other than fraud, report Account Status Code DA (Field 17A). All borrowers will be deleted along with the account history.
To delete an entire account, due to confirmed fraud, report Account Status Code DF (Field 17A). All borrowers will be deleted along with the account history.
To delete a specific borrower, report Z in the ECOA Code field of the segment containing the consumer to be deleted.
CREDIT REPORTING RESOURCE GUIDE | 6-9
Copyright 2006 © Consumer Data Industry Association


As you can see, this says that "only inaccurate accounts be deleted". My argument is that my unpaid account becomes inaccurate the very second they cash my check. Therefore, wouldn't this be the loophole needed in order for an OC to justify removal? I guess the answer is yes, but only if they want to. :glare:


Just speaking in terms of real world business operations -- doesn't surprise me that a CRA would have this sort of language in their contract or legal fine print for users. So what? It's a private contract, it's not statutory law. Have you even bothered to abide by a software EULA?

What's going to happen if a creditor happens to neglect this contractual obligation and drops your tradeline? Is Experian going to sue a creditor because they dropped your tradeline? Is Experian going to refuse to collect any more of their service fees in a huff and cut the creditor off?

I sincerely doubt it. The creditor sincerely doubts it. I haven't attempted a PFD myself. But if I ever do, my attitude will be: 1) No, it's not illegal, quit lying to me. 2) Is it maybe contrary to your contract? I don't give a crap. Do you want some money from me, or do you want zero money from me? Your choice.


You know, that's what I was saying in my mind. Unfortunately, reality struck me and I realized that I have to have this paid off because I'm seeking a mortgage AND this is within SOL.

And I have my answer: they are NOT BUDGING and they did exactly what I thought. When I called them on their statements regarding how PFD results in FCRA violations, etc. I eventually got the "well, it's not the bank's policy to do this." They offered 50% settlement on a $1200 account within SOL. So, do I take the settlement offer and they "settled" notation? Or do I pay in full and take the "paid charge-off" notation? Unfortunately, NOT paying is not an option, like I said earlier. Boo. They also refused a non-disclosure agreement. But, I was a bit surprised at the settlement offer considering it's within SOL, so there's that. <---- Looking for the bright side in all of this! Lol!

Edited by jaided, 23 February 2012 - 04:55 PM.


#14 Gronnie

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Posted 23 February 2012 - 09:03 PM

Take the settlement over pay in full for sure. Won't make any difference in your score if the account is already charged off.

#15 jaided

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Posted 23 February 2012 - 10:24 PM

Take the settlement over pay in full for sure. Won't make any difference in your score if the account is already charged off.



Here's what I posted in another thread:

I'm thinking two things:

- If I PIF, then MAYBE I'll have a chance at a goodwill letter (not likely based on my current experiences, but worth a shot?).
- If I settle, this will look bad to anyone doing a manual review of our mortgage - i.e., if I get into trouble, I don't pay my full debts.

What do you think?

#16 Kevin20

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Posted 24 February 2012 - 02:42 PM

You know, that's what I was saying in my mind. Unfortunately, reality struck me and I realized that I have to have this paid off because I'm seeking a mortgage AND this is within SOL.


Ah, that's the rub, sorry, didn't realize you were within SOL. I agree that I wouldn't expect any cooperation if within SOL, since they could still sue you. So it's settlement or wait out til SOL.




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