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Suing a CRA for a re-aged account

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I rehabbed a Macy's account that first went delinquent sometime around 2001 and was closed around 2001 or 2002. It had not been on my credit report because--I'm almost certain--I had it deleted from my report. I can't find the paperwork to prove it. It was inserted (or re-inserted) into my TU report when I paid it off as a paid chargeoff, scheduled to be removed in 2013. I have disputed 100x based on reinsertion and re-aging (my understanding that is that it should be removed 7 years from when the account first went delinquent), to no avail. This last time I even sent TU copies of old statements I found showing the account going delinquent and being closed in 2001. (I'm not sure if Macy's re-opened the account and closed it again after; those are all the docs I could find.)

 

In any event, Macy's keeps verifying and the account is still on there. What do I do now? Do I have a "case" to sue TU? Would I have to sue Macy's, too? (I'm hoping not, since I have an account with them again and I love them otherwise.)

 

Any guidance on the route I must take (and whether or not I have a valid basis for a lawsuit) would be appreciated. Thank you!!!!

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Sorry. Account CO'd sometime around late 2002/early 2003. I paid them off in 8/06, and that's when it went on my report, which is why it's now listed with an estimated removal date of 7 years from that date (not the date the account first went delinquent, so I am told elsewhere on CB that that is re-aging.)

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Sorry. Account CO'd sometime around late 2002/early 2003. I paid them off in 8/06, and that's when it went on my report, which is why it's now listed with an estimated removal date of 7 years from that date (not the date the account first went delinquent, so I am told elsewhere on CB that that is re-aging.)

 

On the reinsertion, that doesn't apply since there was new activity on the account, and you stated that you don't have any proof it was deleted.

 

Have you asked Macy's about how they are reporting? If you brought the account current, you should only have old lates reporting. If the account has been rehabbed it can't be a CO.

 

Wish I had better news, but making good on an old CO is really bad for your credit.

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When I talked to Macy's about rehab of a CO; what they told me was exactly what happened to you as I understand; You paid the old CO, it is now listed as a paid CO as of the date paid, You likely now have a new Macy listing with a credit limit of old CO amount. Correct? That is not reaging.

Edited by walterg55

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When I talked to Macy's about rehab of a CO; what they told me was exactly what happened to you as I understand; You paid the old CO, it is now listed as a paid CO as of the date paid, You likely now have a new Macy listing with a credit limit of old CO amount. Correct? That is not reaging.

 

Oh boy. If that's what they're doing you're screwed and have no recourse. In that case they're resetting the clock on the CO for seven years. With the new activity it will trash your score.

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When I talked to Macy's about rehab of a CO; what they told me was exactly what happened to you as I understand; You paid the old CO, it is now listed as a paid CO as of the date paid, You likely now have a new Macy listing with a credit limit of old CO amount. Correct? That is not reaging.

 

Oh boy. If that's what they're doing you're screwed and have no recourse. In that case they're resetting the clock on the CO for seven years. With the new activity it will trash your score.

 

I spoke directly with a very senior credit manager at Macy's and that is what they do. The OP has rehabed her account but there was a price to pay and I agree, she's screwed and has no recourse. I am so on board with conventional wisdom that you only pay a CO with an agreement to delete.

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I did the same thing.

 

Stupidly I didn't know that the clock would start all over again from when I re-habbed and paid the old CO and got my new account. Now I have another 7 years from this year until it falls off.

 

It was a price to pay for a new TL. I haven't touched the account before this for about 5 years and it probably would have come off sometime next year, but I guess in all of my repair hype and excitement I though this would be another good TL to have and grow with.

 

Lesson learned the hard way I suppose.

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When I talked to Macy's about rehab of a CO; what they told me was exactly what happened to you as I understand; You paid the old CO, it is now listed as a paid CO as of the date paid, You likely now have a new Macy listing with a credit limit of old CO amount. Correct? That is not reaging.

 

Oh boy. If that's what they're doing you're screwed and have no recourse. In that case they're resetting the clock on the CO for seven years. With the new activity it will trash your score.

 

I don't know how much it's hurting my score, but I'm sure it's keeping it down further than I could be as one of my negative comments is that I recently had a late payment on my accounts. The last payment I made before I re-habbed Macy's was back in 2002 so I guess Fico is counting the DOLA acitivity (3/07) as a late payment even though the lates go back 5 years.

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I didn't think it was reinsertion or reaging, but when I was inquiring as to recourse, several people on this board pointed out to me that it was. With regard to re-aging, I was advised that it doesn't matter that I paid the CO; to reset the clock is illegal and considered reaging, as the DOFD (date of first delinquency) was in 2001. I kept thinking that can't be right, but some knowledgeable people on this board insisted that that was the case. I read the FCRA and it does say that the account is supposed to drop off 7 (or 7.5 years) from the DOFD. Now I'm confused....

 

To answer your question, Shawnee, no I did not bring the account current. You pay off the old account and get a brand new one--new account number and new TL. It's considerered rehabbing the account, but you're actually getting a new one which is why it can be a CO--because it's actually on the old account.

 

Interestingly enough, I only have quasi-proof (e-mails from Lexington in 2003 that the account was on the report at the time) that this account was previously deleted (prior to CO) on EX and EQ. And the CO only appeared on TU. I'm wondering if that's just luck or if it was deleted from the other two so they could not reinsert on them? Probably not, but I thought it was weird...

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Yes, Walter, that is what happened. Again, I never thought that would be re-aging, but I was advised that it emphatically was. Whether this is true or not I don't know... What I do know is that the account CO'd around 2002/2003, so to list it as a recent CO is inaccurate; it was only PAID recently. Theoretically, the only thing that should have changed was the date of last activity. Since it wasn't on my report before and they added it, it would seem to me that it should still be scheduled for removal as the same time that it would have been before.

 

Updating the DOLA (date of last activity) is not supposed to reset the DOFD (date of first delinquency). If this had been on my credit report already, then it should've updated the date of last activity, but still have been scheduled to fall off at the same time. Unless I reset the clock, which is what I originally thought I did, until CBers told me that was not the case.

 

Man, I am confused!!!!

 

And, it seems, screwed! :(

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I didn't think it was reinsertion or reaging, but when I was inquiring as to recourse, several people on this board pointed out to me that it was. With regard to re-aging, I was advised that it doesn't matter that I paid the CO; to reset the clock is illegal and considered reaging, as the DOFD (date of first delinquency) was in 2001. I kept thinking that can't be right, but some knowledgeable people on this board insisted that that was the case. I read the FCRA and it does say that the account is supposed to drop off 7 (or 7.5 years) from the DOFD. Now I'm confused....

 

To answer your question, Shawnee, no I did not bring the account current. You pay off the old account and get a brand new one--new account number and new TL. It's considerered rehabbing the account, but you're actually getting a new one which is why it can be a CO--because it's actually on the old account.

 

Interestingly enough, I only have quasi-proof (e-mails from Lexington in 2003 that the account was on the report at the time) that this account was previously deleted (prior to CO) on EX and EQ. And the CO only appeared on TU. I'm wondering if that's just luck or if it was deleted from the other two so they could not reinsert on them? Probably not, but I thought it was weird...

 

I don't know about what you may have been told in other threads, but the net effect of paying that CO was to make it a fresh CO that will be on your reports until 2013. When you paid last year you made it current and reset the seven year clock. This is sneaky on Macy's part and even more so when they offer it on accounts that went bad years ago. Paying on that account made it current.

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I didn't think it was reinsertion or reaging, but when I was inquiring as to recourse, several people on this board pointed out to me that it was. With regard to re-aging, I was advised that it doesn't matter that I paid the CO; to reset the clock is illegal and considered reaging, as the DOFD (date of first delinquency) was in 2001. I kept thinking that can't be right, but some knowledgeable people on this board insisted that that was the case. I read the FCRA and it does say that the account is supposed to drop off 7 (or 7.5 years) from the DOFD. Now I'm confused....

 

To answer your question, Shawnee, no I did not bring the account current. You pay off the old account and get a brand new one--new account number and new TL. It's considerered rehabbing the account, but you're actually getting a new one which is why it can be a CO--because it's actually on the old account.

 

Interestingly enough, I only have quasi-proof (e-mails from Lexington in 2003 that the account was on the report at the time) that this account was previously deleted (prior to CO) on EX and EQ. And the CO only appeared on TU. I'm wondering if that's just luck or if it was deleted from the other two so they could not reinsert on them? Probably not, but I thought it was weird...

 

I don't know about what you may have been told in other threads, but the net effect of paying that CO was to make it a fresh CO that will be on your reports until 2013. When you paid last year you made it current and reset the seven year clock. This is sneaky on Macy's part and even more so when they offer it on accounts that went bad years ago. Paying on that account made it current.

 

Gypsy Girl; Just think about what occured You had an account that was going to drop off (not dissapear but just no longer eligible to report), you and Macy's renegotiated the contract for all intents and purposes; they offered to open a new account (value offered) in return for your payment on the old account (value recieved), you accepted. Offer-value-acceptance=contract, a new contract. Macy's was right up front when I asked them about each step (they did not volunteer information but did nothing to try an deceive) of their process for rehab, and they put it in writing. What did you ask Macy's and what did they tell you?

Edited by walterg55

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Sorry. Account CO'd sometime around late 2002/early 2003. I paid them off in 8/06, and that's when it went on my report, which is why it's now listed with an estimated removal date of 7 years from that date (not the date the account first went delinquent, so I am told elsewhere on CB that that is re-aging.)

 

On the reinsertion, that doesn't apply since there was new activity on the account, and you stated that you don't have any proof it was deleted.

 

Have you asked Macy's about how they are reporting? If you brought the account current, you should only have old lates reporting. If the account has been rehabbed it can't be a CO.

 

Wish I had better news, but making good on an old CO is really bad for your credit.

 

 

new activity doesn't permit reinsertion...

 

however, not being able to prove that it was deleted is a BAD thing...

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When I talked to Macy's about rehab of a CO; what they told me was exactly what happened to you as I understand; You paid the old CO, it is now listed as a paid CO as of the date paid, You likely now have a new Macy listing with a credit limit of old CO amount. Correct? That is not reaging.

 

 

They can't legally do that...

 

it's 7 years from the DOFD...PERIOD

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I didn't think it was reinsertion or reaging, but when I was inquiring as to recourse, several people on this board pointed out to me that it was. With regard to re-aging, I was advised that it doesn't matter that I paid the CO; to reset the clock is illegal and considered reaging, as the DOFD (date of first delinquency) was in 2001. I kept thinking that can't be right, but some knowledgeable people on this board insisted that that was the case. I read the FCRA and it does say that the account is supposed to drop off 7 (or 7.5 years) from the DOFD. Now I'm confused....

 

To answer your question, Shawnee, no I did not bring the account current. You pay off the old account and get a brand new one--new account number and new TL. It's considerered rehabbing the account, but you're actually getting a new one which is why it can be a CO--because it's actually on the old account.

 

Interestingly enough, I only have quasi-proof (e-mails from Lexington in 2003 that the account was on the report at the time) that this account was previously deleted (prior to CO) on EX and EQ. And the CO only appeared on TU. I'm wondering if that's just luck or if it was deleted from the other two so they could not reinsert on them? Probably not, but I thought it was weird...

 

I don't know about what you may have been told in other threads, but the net effect of paying that CO was to make it a fresh CO that will be on your reports until 2013. When you paid last year you made it current and reset the seven year clock. This is sneaky on Macy's part and even more so when they offer it on accounts that went bad years ago. Paying on that account made it current.

 

this is flat out untrue....

 

 

 

Please show me where in FCRA it says that a payment resets the 7 year clock...

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I didn't think it was reinsertion or reaging, but when I was inquiring as to recourse, several people on this board pointed out to me that it was. With regard to re-aging, I was advised that it doesn't matter that I paid the CO; to reset the clock is illegal and considered reaging, as the DOFD (date of first delinquency) was in 2001. I kept thinking that can't be right, but some knowledgeable people on this board insisted that that was the case. I read the FCRA and it does say that the account is supposed to drop off 7 (or 7.5 years) from the DOFD. Now I'm confused....

 

To answer your question, Shawnee, no I did not bring the account current. You pay off the old account and get a brand new one--new account number and new TL. It's considerered rehabbing the account, but you're actually getting a new one which is why it can be a CO--because it's actually on the old account.

 

Interestingly enough, I only have quasi-proof (e-mails from Lexington in 2003 that the account was on the report at the time) that this account was previously deleted (prior to CO) on EX and EQ. And the CO only appeared on TU. I'm wondering if that's just luck or if it was deleted from the other two so they could not reinsert on them? Probably not, but I thought it was weird...

 

I don't know about what you may have been told in other threads, but the net effect of paying that CO was to make it a fresh CO that will be on your reports until 2013. When you paid last year you made it current and reset the seven year clock. This is sneaky on Macy's part and even more so when they offer it on accounts that went bad years ago. Paying on that account made it current.

 

Gypsy Girl; Just think about what occured You had an account that was going to drop off (not dissapear but just no longer eligible to report), you and Macy's renegotiated the contract for all intents and purposes; they offered to open a new account (value offered) in return for your payment on the old account (value recieved), you accepted. Offer-value-acceptance=contract, a new contract. Macy's was right up front when I asked them about each step (they did not volunteer information but did nothing to try an deceive) of their process for rehab, and they put it in writing. What did you ask Macy's and what did they tell you?

 

 

IF this is what happened, then the NEW account would be positive...the OLD account would still be deleted in 7 years

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I didn't think it was reinsertion or reaging, but when I was inquiring as to recourse, several people on this board pointed out to me that it was. With regard to re-aging, I was advised that it doesn't matter that I paid the CO; to reset the clock is illegal and considered reaging, as the DOFD (date of first delinquency) was in 2001. I kept thinking that can't be right, but some knowledgeable people on this board insisted that that was the case. I read the FCRA and it does say that the account is supposed to drop off 7 (or 7.5 years) from the DOFD. Now I'm confused....

 

To answer your question, Shawnee, no I did not bring the account current. You pay off the old account and get a brand new one--new account number and new TL. It's considerered rehabbing the account, but you're actually getting a new one which is why it can be a CO--because it's actually on the old account.

 

Interestingly enough, I only have quasi-proof (e-mails from Lexington in 2003 that the account was on the report at the time) that this account was previously deleted (prior to CO) on EX and EQ. And the CO only appeared on TU. I'm wondering if that's just luck or if it was deleted from the other two so they could not reinsert on them? Probably not, but I thought it was weird...

 

I don't know about what you may have been told in other threads, but the net effect of paying that CO was to make it a fresh CO that will be on your reports until 2013. When you paid last year you made it current and reset the seven year clock. This is sneaky on Macy's part and even more so when they offer it on accounts that went bad years ago. Paying on that account made it current.

 

this is flat out untrue....

 

 

 

Please show me where in FCRA it says that a payment resets the 7 year clock...

 

Pryan, Paying a CO in full makes it a paid CO on the date it was paid. The account was no longer deliquent.

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I didn't think it was reinsertion or reaging, but when I was inquiring as to recourse, several people on this board pointed out to me that it was. With regard to re-aging, I was advised that it doesn't matter that I paid the CO; to reset the clock is illegal and considered reaging, as the DOFD (date of first delinquency) was in 2001. I kept thinking that can't be right, but some knowledgeable people on this board insisted that that was the case. I read the FCRA and it does say that the account is supposed to drop off 7 (or 7.5 years) from the DOFD. Now I'm confused....

 

To answer your question, Shawnee, no I did not bring the account current. You pay off the old account and get a brand new one--new account number and new TL. It's considerered rehabbing the account, but you're actually getting a new one which is why it can be a CO--because it's actually on the old account.

 

Interestingly enough, I only have quasi-proof (e-mails from Lexington in 2003 that the account was on the report at the time) that this account was previously deleted (prior to CO) on EX and EQ. And the CO only appeared on TU. I'm wondering if that's just luck or if it was deleted from the other two so they could not reinsert on them? Probably not, but I thought it was weird...

 

I don't know about what you may have been told in other threads, but the net effect of paying that CO was to make it a fresh CO that will be on your reports until 2013. When you paid last year you made it current and reset the seven year clock. This is sneaky on Macy's part and even more so when they offer it on accounts that went bad years ago. Paying on that account made it current.

 

this is flat out untrue....

 

 

 

Please show me where in FCRA it says that a payment resets the 7 year clock...

 

Pryan, Paying a CO in full makes it a paid CO on the date it was paid. The account was no longer deliquent.

 

 

True, it DOES make it a paid CO...but it does NOT make the account current...it does NOT change the DOFD...the account is no longer open...they MAY open a NEW account..but THAT account is no longer...

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True, it DOES make it a paid CO...but it does NOT make the account current...it does NOT change the DOFD...the account is no longer open...they MAY open a NEW account..but THAT account is no longer...

 

But when PIF the DOFD no longer applies. Now it becomes a paid CO with a DOLA when it was paid last year. The DOFD can only be relied on for reporting pursposes if the account is never brought current and PIF. So when paid, it was PIF can closed.

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Pryan is absolutely correct. Paying on a previously charged off account NEVER resets the fall off date. I can post FTC letters to that effect if needed, however pryan is right.

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Pryan is absolutely correct. Paying on a previously charged off account NEVER resets the fall off date. I can post FTC letters to that effect if needed, however pryan is right.

 

Are these under the FTC staff opinion letters? If so a lot of people have been screwed by this because the CRAs are resetting the clock to the date the CO was paid.

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Division of Financial Practices

Clarke W. Brinckerhoff

Attorney

202-326-3224February 15, 2000

Ms. Alaina K. Amason

14155 Shire Oak

San Antonio, TX 78247

 

Dear Ms. Amason:

 

This responds to your letter concerning the time limitations imposed by the Fair Credit Reporting Act ("FCRA") on the reporting of chargeoff accounts by a consumer reporting agency ("CRA," usually a credit bureau). We list your inquiries on this topic below in italics, with our replies immediately following each item.

 

1. What reporting limits does the FCRA provide with respect to chargeoffs, and how long have they been in effect?

 

Section 605(a)(4), which has been in effect since the FCRA became effective in April 1971, has always prohibited CRAs from reporting chargeoffs that are more than seven years old.(1) Section 623(a)(5), which became law in September 1997, requires a creditor that reports a chargeoff to a CRA to notify the agency (within 90 days of reporting the account) of "the month and year of the commencement of the delinquency that immediately preceded" the chargeoff. Section 605©(1) provides that the seven year period begins 180 days from that date. Both provisions were part of the major revision to the FCRA that were enacted in 1996.(2)

 

2. Is the reporting period extended if (A) the original creditor sells or transfers the account to another creditor, (B) the consumer responds to post-chargeoff collection efforts by making a payment on the debt, or © the consumer disputes the account with a CRA?

 

Does it matter whether the 7-year period has expired when any of these events occurs? No. In enacting the new provisions discussed above, Congress intended to establish a date certain -- 180 days after the start of the delinquency that led to the chargeoff -- to begin the obsolescence period. It did so to correct the often lengthy extension of the period that resulted from later events under the original FCRA. Enclosed are two staff opinion letters (Kosmerl, 06/04/99; Johnson, 08/31/98) that discuss the impact of these provisions, and the legislative history relating to their enactment, in more detail. Because the commencement of the seven year period is now described with some precision by the statute, it is our opinion that none of the subsequent events you listed -- sale of the charged off account by the creditor, or a payment on or dispute about the account by the consumer -- changes the allowable period for a CRA to report a chargeoff.

3. Since Sections 623(a)(5) and 605©(1) provide new rules for calculating the 7-year period that became effective in 1997, do chargeoff accounts now have different obsolescence periods depending on when the chargeoff occurred?

 

Yes. Section 605©(2) states that the section "shall apply only to items of information added to the (CRA) file of a consumer on or after" 455 days after enactment, or December 29, 1997. Therefore, a chargeoff reported to a CRA on or after that date is subject to the new commencement-of-the-delinquency method of calculating the obsolescence period set forth in Sections 623(a)(5) and 605©(1). On the other hand, a chargeoff reported to a CRA before December 29, 1997, is not covered by the new provisions, as discussed in one of the enclosed letters (Kosmerl, 06/04/99). If a credit account was reported as a chargeoff before that date, the Commission's view has been that it can be reported for seven years from the date the creditor actually charged it off.(3)

 

The opinions set forth in this informal staff letter are not binding on the Commission.

 

Sincerely yours,

 

Clarke W. Brinckerhoff

 

1. Section 605(B) provides that there is no time limit applicable to a report made in connection with credit involving a principal amount (or insurance with a face amount) of $150,000 or more, or employment for a salary of $75,000 or more. Prior to September 1997, those amounts were $50,000 and $20,000, respectively.

 

2. The Consumer Credit Reporting Reform Act of 1996 (Title II, Subchapter D, of Public Law 104-280, signed into law on September 30, 1996), made many other changes to the FCRA.

 

3. Commentary on the Fair Credit Reporting Act, 16 CFR Part 600 Appendix, comment 605(a)(4)-2. 55 Fed. Reg. 18804, 18818 (May 4, 1990).

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I stand corrected. This is even more to the point:

 

2. Is the reporting period extended if (A) the original creditor sells or transfers the account to another creditor, (:huh: the consumer responds to post-chargeoff collection efforts by making a payment on the debt, or © the consumer disputes the account with a CRA? Does it matter whether the 7-year period has expired when any of these events occurs?

 

No. In enacting the new provisions discussed above, Congress intended to establish a date certain -- 180 days after the start of the delinquency that led to the chargeoff -- to begin the obsolescence period. It did so to correct the often lengthy extension of the period that resulted from later events under the original FCRA. Enclosed are two staff opinion letters (Kosmerl, 06/04/99; Johnson, 08/31/98) that discuss the impact of these provisions, and the legislative history relating to their enactment, in more detail. Because the commencement of the seven year period is now described with some precision by the statute, it is our opinion that none of the subsequent events you listed -- sale of the charged off account by the creditor, or a payment on or dispute about the account by the consumer -- changes the allowable period for a CRA to report a chargeoff.

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