Jump to content

Please consider disabling your adblocker for CreditBoards if you have not already done so.  This site depends on advertising revenue to stay online.


Is this an FCRA violation

Recommended Posts

I’m a little rusty after all these years. Here is my situation. 
 

I have an original creditor. I owed them several thousand dollars. We agreed to a settlement for 25 percent of the balance a few months back. I have it in writing that upon receipt of this amount the balance will be forgiven and I will be released from liability as to the balance. 
 

ok. I paid this to the OC. They then reported to the credit bureau that my new balance was what it was before minus this payment. Still charged off and no notation of settled less than legally owed. 
 

I initiated a written dispute to the cra. 
 

they verified the reporting and said the OC attested it was being reported correctly. 
 

I then applied for my visa to be increased at my Credit union. 
 

I was denied due to this and only this derog. They said if it had a 0. Balance or was marked settled they would have approved me for my request. 
 

since 2 cycles have already gone by and they are not reporting settled and they confirmed to the CRA that they were reporting correctly what is my recourse now. 
 

this OC has an arb clause in their card member  agreement and a clause that If I am awarded any amount above a proposed pre arb settlement I automatically get 7500. 
 

thoughts?

Share this post


Link to post
Share on other sites

I'm not prepared to respond re the possibilities of a settlement under a finding of a FCRA violation.  However, a failure to correct an inaccuracy in response to your CRA dispute certainly qualifies as a FCRA violation, in my book.

 

But permit me to play devil's advocate:  Did you act as instructed so that the creditor would reasonably be aware that your payment was in response to the settlement offer?  Did the offer specify a manner through which the payment was to be received, and were you compliant?

 

Your narrative is light on details in this respect, so it bears asking.  If they didn't communicate specific instruction by which to remit payment, then it's likely sufficient evidence of a violation that you remitted payment, it was cashed, and you have confirmation of receipt by virtue of the account credit.  However, if they were more specific and you failed to follow those specifications, I could see where this might give the creditor an out and an opportunity to correct the reporting without being cited for a violation.

 

I'll note that, in your shoes, I would have followed up by phone or letter, subsequent to remitting payment, with the area that issued the settlement offer to confirm receipt and that they intended to follow through with the amended reporting, with an aim to avert the situation you find yourself in.  That said, even absent this course of action, the creditor is still in violation of the FCRA reporting requirements (again, provided that you followed any and all stipulated payment procedure).

Share this post


Link to post
Share on other sites
1 hour ago, hdporter said:

I'm not prepared to respond re the possibilities of a settlement under a finding of a FCRA violation.  However, a failure to correct an inaccuracy in response to your CRA dispute certainly qualifies as a FCRA violation, in my book.

 

But permit me to play devil's advocate:  Did you act as instructed so that the creditor would reasonably be aware that your payment was in response to the settlement offer?  Did the offer specify a manner through which the payment was to be received, and were you compliant?

 

Your narrative is light on details in this respect, so it bears asking.  If they didn't communicate specific instruction by which to remit payment, then it's likely sufficient evidence of a violation that you remitted payment, it was cashed, and you have confirmation of receipt by virtue of the account credit.  However, if they were more specific and you failed to follow those specifications, I could see where this might give the creditor an out and an opportunity to correct the reporting without being cited for a violation.

 

I'll note that, in your shoes, I would have followed up by phone or letter, subsequent to remitting payment, with the area that issued the settlement offer to confirm receipt and that they intended to follow through with the amended reporting, with an aim to avert the situation you find yourself in.  That said, even absent this course of action, the creditor is still in violation of the FCRA reporting requirements (again, provided that you followed any and all stipulated payment procedure).

Thank you for the reply. The way it went down is this. I contacted corporate offices via email and plead my case for settlement.  A manager called me back and faxed me a settlement offer. It was originally for the amount I paid over 24 months but I was free to pay it early. I used my bonus and paid it at once.  When i called in to the number on the fax I told the woman taking the payment that I was electing to pay the entire settlement at once as opposed to over 24. I did and she congratulated me. 
 

It was silent on how I had to pay. I paid via ach debit. 
 

they sent me a settled in full letter releasing my obligation from the balance. 
 

they updated one bureau as the balance minus what I paid. I disputed it was verified despite me sending the proof (what they sent me) to the bureau. 
 

so here we are. I’m gonna send them a pre arbitration claim notice Monday and see what they say. 

Edited by mysticspirit25

Share this post


Link to post
Share on other sites

Appreciate feedback.  Glad you grasp I wasn't challenging your actions, but just making sure there weren't any potholes that had been left unfilled!

 

I'll leave it to your discretion on how you proceed.  Again, speaking for myself, it would be more important to correct the reporting promptly vs seeking action under FCRA.  But I'm not suggesting there's any "noble' in that precedence.

 

Bear in mind you have one other "potential" avenue to seek a remedy:  You could enter a new CRA dispute, rejecting the result of the first dispute and assert that there is no balance due, as evidenced by the release letter.

 

The onus is on the CRA, under the fCRA, to reinvestigate again, this time having sufficient documentation so as to presuppose there is a strong likelihood the current reporting is inaccurate.  If they refuse to investigate (citing the prior dispute result), or they merely ask the creditor to re-confirm what they've reported and roll over without challenging that information, then you have a reasonable case under which to seek action against the CRA.

 

In bringing suit against the CRA, you raise the stakes a bit vs the creditor suit.  In the case of the creditor, it might be successfully argued that in good faith they relied upon their system to update properly, but proper handling of your payment simply "fell through a crack".  In other words, the didn't deliberately engage in some action that resulted in inaccurate reporting. 

 

On the other hand, if the CRA essentially ignores the documentation you submitted and didn't approach the re-investigation with the assumption that the current reporting could likely be inaccurate, and in turn fails to challenge the OC when they reaffirm the inaccuracy, then the erroneous reporting could be deemed intentional -- and legal remedies may be significantly higher in the case of intentional disregard as opposed to an unintended system oversight.

Share this post


Link to post
Share on other sites

Years ago I settled with a creditor and they forgave a portion and set me up on a payment plan. They reported the forgiven amount as a write off on the credit reports.

Share this post


Link to post
Share on other sites
16 hours ago, mysticspirit25 said:

We agreed to a settlement for 25 percent of the balance a few months back. I have it in writing that upon receipt of this amount the balance will be forgiven and I will be released from liability as to the balance. 

Your agreement did not contain any language regarding reporting to a credit repository?

Share this post


Link to post
Share on other sites

Marv asks a cogent question- there is a difference in reporting than not taking further collection activities.  What is the SPECIFIC language in the Agreement and what was placed in the written dispute to the bureau(s)?

Share this post


Link to post
Share on other sites

The settlement document does not specify credit reporting.  I had just ass(umed) that this OC would mark settled accounts like all the rest did.  What it does say is "upon receipt of the final payment, we will consider the account settled for less than the full balance."

 

My written dispute to the bureau(s) was that the account was settled and they must report it as "settled-less than legally owed".  This OC refuses to do that.  They cannot continue to report a "past due" when the settlement document clearly states "...settled for less than the full balance" regardless if the document mentions specific reporting.  They are reporting it inaccurately.

Edited by mysticspirit25

Share this post


Link to post
Share on other sites

How thorough was your letter to the bureau(s) and what attached documentary evidence in support of the claim did you offer?  The Agreement would certainly serve to cement the derog to the file but would strengthen the dispute...

Share this post


Link to post
Share on other sites
17 hours ago, centex said:

How thorough was your letter to the bureau(s) and what attached documentary evidence in support of the claim did you offer?  The Agreement would certainly serve to cement the derog to the file but would strengthen the dispute...

 

I guess I'm confused here:  If the OC agreed that the OP "would be released from liability for the balance", then I would have thought the creditor would be obligated to report the account with a "0" balance due (with the annotation that the account was settled for less than the full amount due). 

 

I don't think there was any assumption on the part of @mysticspirit25 called for; he/she should have been able to rely upon a "0" balance reporting.  And, if the CRA involved is provided a copy of the creditors agreement, they should concur.

Share this post


Link to post
Share on other sites
3 hours ago, hdporter said:

 

I guess I'm confused here:  If the OC agreed that the OP "would be released from liability for the balance", then I would have thought the creditor would be obligated to report the account with a "0" balance due (with the annotation that the account was settled for less than the full amount due). 

 

I don't think there was any assumption on the part of @mysticspirit25 called for; he/she should have been able to rely upon a "0" balance reporting.  And, if the CRA involved is provided a copy of the creditors agreement, they should concur.

This is why we need more information.  Released from liability does NOT necessarily confer that a zero balance would be reported.  Released from liability CAN be interpreted as simply meaning they aren't going to sue for the balance or sell the balance off, but CAN still be interpreted as the balance remained on the sheet for those interested in OP's history on the account. 

 

We ALSO don't know if the Agreement reached between the parties would have required payment to a different channel than normal payments would be made.  This can ALSO be a variable in these sorts of matters.

 

Actions HAVE to be precise.  Too often, people make recommendations to move forward on a course without knowing all of the particulars, which is why those of us used to dealing WITH precision try to flesh out matters.  In some respects, it is like when I get a call from someone claiming their loved one is under "the old law," to which I have to reply "which 'old law?'" This is because across multiple decades in my area, I have seen MANY changes that impacted sentencing-related issues.  Precision is ALSO why I abhor the use of generic letters that everyone has seen for 20+ years...

Share this post


Link to post
Share on other sites

I necessarily must defer to your judgement here, @centex  I had interpreted a release from a liability as effectively forgiving the debt balance.  A little reading suggests that I may have overreached in.  It would appear that it's merely a statement that the debt holder won't seek to enforce collection of the outstanding balance.  (And, with the typical qualification that "I am not a lawyer", that interpretation should be taken with a grain of salt.)

 

Just for clarification, it may be worthwhile for OP to post the full agreement text. 

 

You highlight a point that should be emphasized more in this forum:  Don't enter into a settlement agreement lightly; ensure that any specific action that you desire is strictly spelled out.  (And consider paying up for a document review by a qualified attorney.)

Share this post


Link to post
Share on other sites

 I have it in writing that upon receipt of this amount the balance will be forgiven and I will be released from liability as to the balance. 
 

 

This is more than enough to convince any judge that the matter is settled to the satisfaction of both parties. One would logically assume that the credit reporting should reflect this.

 

this OC has an arb clause in their card member  agreement and a clause that If I am awarded any amount above a proposed pre arb settlement I automatically get 7500.

 

This ^^^^^^^^

 

Just the cost of arb (5-6K startup for them) should be enough to get them to properly update.

Share this post


Link to post
Share on other sites
3 hours ago, legaleagle2012 said:

 I have it in writing that upon receipt of this amount the balance will be forgiven and I will be released from liability as to the balance. 
 

 

This is more than enough to convince any judge that the matter is settled to the satisfaction of both parties. One would logically assume that the credit reporting should reflect this.

 

this OC has an arb clause in their card member  agreement and a clause that If I am awarded any amount above a proposed pre arb settlement I automatically get 7500.

 

This ^^^^^^^^

 

Just the cost of arb (5-6K startup for them) should be enough to get them to properly update.

1) The Settlement would likely preclude being able to fall back upon the Cardholder Agreement precisely because the Agreement is no longer effective because there is no liabilities attaching

 

2) Contracts are typically interpreted based upon the four corners.  It is essentially the same as the presumed rational juror where an appellate court will not superimpose its own judgment upon a case where there is no showing of an abuse of discretion. 

 

3) Settled with a release of liability does NOT speak to the reporting. 

 

4) It is BEYOND time for people with nothing at stake (like a professional license or malpractice suit) to encourage non-practitioners to pursue claims in court that won't stand up and risk getting the non-practitioner pursuing frivolous claims sanctioned FOR the frivolity. 

 

5) Any other discussion without knowing the PRECISE terms in the Agreement is futile.

Share this post


Link to post
Share on other sites

1. Arbitration clauses (every one I've seen) state that arb may be invoked at any time for any of the specific reasons in the clause; even after a judgment. These things are so loosely written, they cover virtually anything connected to the account and its use.

 

The 5th Circuit agrees.

CIVIL ACTION NO. 19-10235 SECTION: "G"(4)

09-16-2019

ANGEL HANBERRY v. FIRST PREMIER BANK

 

"Plaintiff's argument that the FCRA claims  have "nothing to do with a credit card contract" is not persuasive. Plaintiff alleges that she brings the current FCRA claims because FPB reported Account 1276 and Account 7058 to credit bureaus—the same accounts that Plaintiff alleges have "nothing to do" with her FCRA claims. Thus, Plaintiff's FCRA claims "relate to" or "arise out of" the credit card contracts she signed for Account 1276 and Account 7058.

This case is not a close call but, even if it were, any doubts concerning the scope of an arbitration clause is resolved in favor of arbitrability. Plaintiff cannot overcome that strong presumption in favor of arbitrability. Therefore, the Court finds that Plaintiff's claims fall within the scope of the Arbitration Provisions."
 

As for the rest, nobody suggested he sue. Arbitrators are mostly retired judges. As for the contract, we go with what they post; it would be nice if they told us who the creditor is and post the thing so we can read it. I for one am tired of posts like "hey, I just got sued, what do I do?"

 

Share this post


Link to post
Share on other sites
On 11/26/2020 at 4:40 AM, legaleagle2012 said:

1. Arbitration clauses (every one I've seen) state that arb may be invoked at any time for any of the specific reasons in the clause; even after a judgment. These things are so loosely written, they cover virtually anything connected to the account and its use.

 

 

What was the old saying -- that cockroaches and arbitration agreements are the only things to survive nuclear war.  

 

I would immediately contact the OC, and demand they fix the credit reporting.  Partly because that is usually the fastest way, and partly because going through the channels makes an FCRA case stronger.  

 

Not having seen that particular arbitration agreement, it does sound like the threat of arbitration can be a mighty big stick just based on what the OP said.  

Share this post


Link to post
Share on other sites
On 11/26/2020 at 4:40 AM, legaleagle2012 said:

1. Arbitration clauses (every one I've seen) state that arb may be invoked at any time for any of the specific reasons in the clause; even after a judgment. These things are so loosely written, they cover virtually anything connected to the account and its use.

 

The 5th Circuit agrees.

CIVIL ACTION NO. 19-10235 SECTION: "G"(4)

09-16-2019

ANGEL HANBERRY v. FIRST PREMIER BANK

 

"Plaintiff's argument that the FCRA claims  have "nothing to do with a credit card contract" is not persuasive. Plaintiff alleges that she brings the current FCRA claims because FPB reported Account 1276 and Account 7058 to credit bureaus—the same accounts that Plaintiff alleges have "nothing to do" with her FCRA claims. Thus, Plaintiff's FCRA claims "relate to" or "arise out of" the credit card contracts she signed for Account 1276 and Account 7058.

This case is not a close call but, even if it were, any doubts concerning the scope of an arbitration clause is resolved in favor of arbitrability. Plaintiff cannot overcome that strong presumption in favor of arbitrability. Therefore, the Court finds that Plaintiff's claims fall within the scope of the Arbitration Provisions."
 

As for the rest, nobody suggested he sue. Arbitrators are mostly retired judges. As for the contract, we go with what they post; it would be nice if they told us who the creditor is and post the thing so we can read it. I for one am tired of posts like "hey, I just got sued, what do I do?"

 

This case is easily defined separately from the fact patterns alleged by OP, to include that the move for Arbitration in Hanberry was not made BY Hanberry.  The Bank was who sought arbitration on matters related to the two accounts Hanberry had defaulted upon after Hanberry attempted to bluff their way out of the reporting. 

 

Do not ALSO overlook that the Courts will look to the four corners of the most recent Agreement between the Parties...and unless THAT Agreement included Arbitration, there is no current Agreement that includes an Arbitration clause.  Thr is no apparently claim by Hanberry that their matters had previously been settled.   

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.





  • Member Statistics

    • Total Members
      179,640
    • Most Online
      2,046

    Newest Member
    kellythomas
    Joined

About Us

Since 2003, creditboards.com has helped thousands of people repair their credit, force abusive collection agents to follow the law, ensure proper reporting by credit reporting agencies, and provided financial education to help avoid the pitfalls that can lead to negative tradelines.
×
×
  • Create New...

Important Information

Guidelines