New York Consumer Litigation Blog Archive Credit Industry Trade Group Issues Guidelines For Reporting Debts
In an informational letter addressing data furnisher responsibilities for third-party collection agencies and debt purchasers, the Consumer Data Industry Association on October 8, 2007 reinforced its recommendation for all data furnishers to convert to the Metro 2 Format.
The Consumer Data Industry Association (CDIA) released an informational letter this month addressing data furnisher responsibilities for third-party collection agencies and debt purchasers. In this letter, the CDIA reinforced its recommendation for all data furnishers to convert to the Metro 2 Format. Currently, the Metro 2 Format does not address additional reporting requirements for accounts that have either been returned to the original lender or resold, in the case of debt purchasers. Therefore, this letter clarified a data furnisher’s duties in response to such situations.
When an account is returned to the original lender or resold, the data furnisher should inform the national consumer reporting agency to delete the account from the consumer’s credit file, as it is no longer an account for which the furnisher can collect. The letter contains codes for reporting the status of the account, and only permits the reporting of four account status criteria:
1. Account assigned to internal or external collections.
2. Paid in full (was a collection account).
3. Delete entire account due to confirmed fraud.
4. Delete entire account (for reasons other than fraud).
In addition, one of the aforementioned values should also be used for accounts reported in error. The differentiation of these status categories reinforces the importance of not deleting paid in full accounts.
Next, the letter stressed the importance of properly reporting the date of delinquency as defined in Sections 623(a)(5)(A) and (B) of the Fair Credit Reporting Act (FCRA). The Metro 2 Format requires the reporting\u003cbr /\>of this information to ensure the calculation of this date does not change when an account is transferred or sold from one agency to another.
Finally, for agencies collecting medical debts, it is of the utmost importance to determine if the agency is considered a medical information provider under Section 623(a)(9) of the FCRA. If an agency is a medical information provider, the agency is required to notify the consumer reporting agency of this fact. This information can also be relayed in the Metro 2 Format.
