Collector - November 2020 - 32

BUSINESSOPERATIONS

Credit Reporting Insights
ACA's newest version of the FCRA Compliance Guide is here! Check out this excerpt to get a feel for how it can help
strengthen your compliance efforts.

A

CA International recently
released the latest edition of ACA
International's Guide to the Fair
Credit Reporting Act. The new guide is packed
with critical industry information and is
available in both digital and print versions.
The updated guide features detailed
analysis of the latest FCRA court decisions,
making it a must for every member's
compliance department. It also includes
important new information on relevant
regulatory guidance and consumer reporting
agency reforms impacting consumer
information furnishers.
What follows is an excerpt from the guide
(footnotes omitted):

CHAPTER 3: REPORTING PERIOD
Creditors and debt collectors are
permitted to furnish a significant amount
of information to a consumer reporting
agency (CRA), however, Section 605 [15
U.S.C. Section 1681c] of the FCRA imposes
some limitations on the type of information
that may be reported as well as limitations
regarding how long the information may
be reported. These restrictions apply to
the inclusion of adverse information in
consumer files. The FCRA does not include
any specific time restrictions on the
reporting of information that is not adverse.
Aside from the requirements under the
FCRA, CRAs have additional restrictions
on the type of information that may be
included in consumer reports.

3.1 ACCOUNTS IN COLLECTION
Accounts that have been placed for
collections may be reported for a period of
seven years. The term "placed for collections"
applies to internal collection activities by a
creditor, as well as placement with an outside
debt collector. While little case law exists
on this point, according to guidance from
the Federal Trade Commission (FTC), an

32

account is "placed for collections" when
validation notices or other collection
efforts are initiated. Sending a consumer
a "reminder" notice, though, does not
constitute placement for collection.
The seven-year reporting period for
accounts placed in collections begins to run
180 days after the date of delinquency. The
date of delinquency is the month and year
of the commencement of the delinquency
on the account that immediately preceded
the collection activity or the account being
charged to profit or loss. This means that if
the date of delinquency for an account placed
in collections is Jan. 1, 2010, the information
regarding the delinquency could remain in
the consumer's credit file until June 28, 2017.
Because the date of delinquency determines
the length of time a debt may be reported, the
furnisher must provide that date within 90
days of reporting the information.
The seven-year reporting period is not
extended when an account is reassigned
or sold. For example, if a creditor attempts
to collect an account internally, including
reporting the debt to a CRA, and then
forwards the account to a third-party debt
collector a year later, the debt may still only
appear on a consumer report for seven
years and 180 days from the date originally
reported as the date of delinquency. Similarly,
if a debt is assigned to a third-party debt
collector and later forwarded to another debt
collector, the debt can only be reported for
seven years and 180 days from the date the
debt was originally reported delinquent.
However, if a consumer brings a past
due account current and returns to a
regular payment plan, the seven-year
reporting period will begin again if the
account is forced into collections a second
time. Consequently, if a debt is placed in
collections more than once, the seven-year
reporting period will be determined by the
most recent date of delinquency. Partial or

full payment of the account, however, does
not extend the reporting period, nor does it
necessitate the removal of the information
from the consumer report before the sevenyear period has expired.
Once an account has been paid in full,
the consumer report information should
generally be updated to reflect the account's
paid status, rather than being deleted. While
little guidance is available on this point,
some members of the financial services and
collection industries argue that deleting a
report once an account is paid, instead of
updating the report as "paid," amounts to
an inaccuracy and also weakens the overall
accuracy and integrity of the entire consumer
reporting system. If a furnisher decides to
delete accounts from consumer reports once
they are paid, it may be beneficial to review
the agreement between the furnisher and the
respective CRA to ensure that deletion of paid
accounts is not a breach of the agreement.
To purchase your copy of ACA's Guide
to the Fair Credit Reporting Act, visit
acainternational.org/shop.

ACAINTERNATIONAL.ORG


http://www.acainternational.org/shop http://www.ACAINTERNATIONAL.ORG

Collector - November 2020

Table of Contents for the Digital Edition of Collector - November 2020

Collector - November 2020 - Cover1
Collector - November 2020 - Cover2
Collector - November 2020 - 1
Collector - November 2020 - 2
Collector - November 2020 - 3
Collector - November 2020 - 4
Collector - November 2020 - 5
Collector - November 2020 - 6
Collector - November 2020 - 7
Collector - November 2020 - 8
Collector - November 2020 - 9
Collector - November 2020 - 10
Collector - November 2020 - 11
Collector - November 2020 - 12
Collector - November 2020 - 13
Collector - November 2020 - 14
Collector - November 2020 - 15
Collector - November 2020 - 16
Collector - November 2020 - 17
Collector - November 2020 - 18
Collector - November 2020 - 19
Collector - November 2020 - 20
Collector - November 2020 - 21
Collector - November 2020 - 22
Collector - November 2020 - 23
Collector - November 2020 - 24
Collector - November 2020 - 25
Collector - November 2020 - 26
Collector - November 2020 - 27
Collector - November 2020 - 28
Collector - November 2020 - 29
Collector - November 2020 - 30
Collector - November 2020 - 31
Collector - November 2020 - 32
Collector - November 2020 - 33
Collector - November 2020 - 34
Collector - November 2020 - 35
Collector - November 2020 - 36
Collector - November 2020 - 37
Collector - November 2020 - 38
Collector - November 2020 - 39
Collector - November 2020 - 40
Collector - November 2020 - 41
Collector - November 2020 - 42
Collector - November 2020 - 43
Collector - November 2020 - 44
Collector - November 2020 - 45
Collector - November 2020 - 46
Collector - November 2020 - 47
Collector - November 2020 - 48
Collector - November 2020 - Cover3
Collector - November 2020 - Cover4
http://online.collector.com/collectormagazine/202012
http://online.collector.com/collectormagazine/202011
http://online.collector.com/collectormagazine/202010
http://online.collector.com/collectormagazine/202009
http://online.collector.com/collectormagazine/202008
http://online.collector.com/collectormagazine/202007
http://online.collector.com/collectormagazine/202006
http://online.collector.com/collectormagazine/202005
http://online.collector.com/collectormagazine/202004
http://online.collector.com/collectormagazine/202003
http://online.collector.com/collectormagazine/202002
http://online.collector.com/collectormagazine/202001
http://online.collector.com/collectormagazine/201912
http://online.collector.com/collectormagazine/201911
http://online.collector.com/collectormagazine/201910/
http://online.collector.com/collectormagazine/201909/
http://online.collector.com/collectormagazine/201908/
http://online.collector.com/collectormagazine/201907/
http://online.collector.com/collectormagazine/201906/
http://online.collector.com/collectormagazine/201905/
http://online.collector.com/collectormagazine/201904/
http://online.collector.com/collectormagazine/201903/
http://online.collector.com/collectormagazine/201902/
http://online.collector.com/collectormagazine/201901/
http://online.collector.com/collectormagazine/201812/
http://online.collector.com/collectormagazine/201811/
http://online.collector.com/collectormagazine/201810/
http://online.collector.com/collectormagazine/201809/
http://online.collector.com/collectormagazine/201808/
http://online.collector.com/collectormagazine/201807/
http://online.collector.com/collectormagazine/201806/
http://online.collector.com/collectormagazine/201805/
http://online.collector.com/collectormagazine/201804/
http://online.collector.com/collectormagazine/201803/
http://online.collector.com/collectormagazine/201802/
http://online.collector.com/collectormagazine/201801/
http://online.collector.com/collectormagazine/201712/
http://online.collector.com/collectormagazine/201711/
http://online.collector.com/collectormagazine/201710/
http://online.collector.com/collectormagazine/201709/
http://online.collector.com/collectormagazine/201708/
http://online.collector.com/collectormagazine/201707/
http://online.collector.com/collectormagazine/201706/
http://online.collector.com/collectormagazine/201705/
http://online.collector.com/collectormagazine/201704/
http://online.collector.com/collectormagazine/201703/
http://online.collector.com/collectormagazine/201702/
http://online.collector.com/collectormagazine/201701/
http://online.collector.com/collectormagazine/201612/
http://online.collector.com/collectormagazine/201611/
http://online.collector.com/collectormagazine/201610/
http://online.collector.com/collectormagazine/201609/
http://online.collector.com/collectormagazine/201608/
http://online.collector.com/collectormagazine/201607/
http://online.collector.com/collectormagazine/201606/
http://online.collector.com/collectormagazine/201605/
http://online.collector.com/collectormagazine/201604/
http://online.collector.com/collectormagazine/201603/
http://online.collector.com/collectormagazine/201602/
http://online.collector.com/collectormagazine/201601/
http://online.collector.com/collectormagazine/201512/
http://online.collector.com/collectormagazine/201511/
http://online.collector.com/collectormagazine/201510/
http://online.collector.com/collectormagazine/201509/
http://online.collector.com/collectormagazine/201508/
http://online.collector.com/collectormagazine/201507/
https://www.nxtbookmedia.com