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Collectors use incorrect credit reporting dates to pressure consumers.

One of the most sinister tactics employed by collection agencies is the re-aging of account entries.

The Fair Credit Reporting Act prohibits delinquent accounts that are charged off or placed for collection from being reported to bureaus after seven years plus 180 days from the date of first delinquency. Collection agencies are notorious for changing this cutoff date to serve their ends and reporting information fraudulently to put pressure on consumers to pay their debts. Sound like science fiction? Guess again. Here’s a partial press release from the FTC concerning a collection agency that does this: 

FTC
For Release: May 13, 2004
NCO Group to Pay Largest FCRA Civil Penalty to Date.

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.

Most debt collectors are truly vicious. I suppose they also do this in order to get around not only the FCRA but also other state laws, like ones that forbid any collection activity for accounts older than a certain number of years. Yes, a consumer may still owe the debt until it is either paid or written off in bankruptcy, but collectors are forbidden to even attempt collection after a certain number of years in most states.

And if NCO Group’s shenanigans sound like an isolated incident, they’re not. Michael Weed, a former employee of the collection agency Asset Acceptance, filed a suit against that company for wrongful termination. An employee for eight years, he claims that he went to upper management to report re-aging and was subsequently terminated. In addition to his claims of re-aging, he reported the following breaches:

• "In order for a consumer to clear their name, they have to pay the debt. They made a lot of money off of this. There were 500 mistakes that I know of."
• "Asset violated disclosure laws by giving out debt information to third parties, such as relatives."
• "Asset would intentionally delay settlement of debt disputes to force debtors to pay the claim, and even if they didn’t even owe the debt, they would pay it in order to get a mortgage."

Be forewarned, this is not an isolated incident but the modus operandi of many collection agencies.