Can an original creditor report a balance owed after the debt is sent to another collector?
You have an original creditor (Capital One, Synchrony) on your credit report showing a balance, and they have sent it to another debt collector (Midland Funding, LVNV, Portfolio Recovery) who is also on your credit report showing a balance.
Is this allowed?
The short answer is no.
This is inaccurate. On your credit report, this makes it appear as if you have two separate accounts and owe double the balance.
Let’s say I owe Capital One $5,000.
Capital One then sends my debt to Portfolio Recovery.
However, Capital One still shows $5,000 on my report.
And Portfolio is also reporting $5,000 on my report.
Now it looks like I owe $10,000 between the two companies.
This is not true.
It is fine for an original creditor to transfer or sell the debt to a debt collector.
As long as the original creditor reports properly, they can stay on your report.
If the original creditor continues to report, they must show your account as having a $0 balance.
There is no longer anything owed to that original creditor after they have transferred or sold the debt.
Then it would be okay for the debt collector to show up on your report with the correct balance.
However, if they are both on the report and showing a balance, this should be disputed.
You have a right to a 100% accurate credit report.
If a company is reporting false information on your report and does not fix it, sue them for breaking the law.
Check your credit reports.
Study those reports.
If you have both an original creditor and the debt collector on the report, do they both show a balance?
Does the information match up?
Maybe the original creditor is gone and you were dealing with two different debt collectors, and they are both on your report with a balance for the same debt.
This is not right.
Once a collector sells to another collector, they should be completely off your report.
The only collector who should be on your report is the one who currently owns the debt.
If you have multiple collectors for the same account on your report, this is a huge problem.
You should definitely contact a consumer lawyer if this is happening to you.
If you are unsure where how to start looking for errors on your credit report, we have a few articles to help guide you through the process:
- Can I fix my credit reports on my own in Alabama?
- How do I know if I have any errors on my credit reports?
- 3 tips in 3 minutes: Credit reporting by a debt collector
- Charge off: How to get one removed from your credit reports by looking for factual errors
If you live in Alabama and you have any questions, feel free to get in touch with us.
We would be glad to help you in any way we can.
You can reach us by phone at 1-205-879-2447, or you can fill out a contact form and we will get in touch with you quickly.
Have a great day!