One theme we see throughout comments is that debt sold adds confusion as to whom is the creditor, and also triggers a new credit entry, making the debt appear as incremental (additional), when it is simply transferred, and fresh.
The solution to this is simple; do not allow credit bureaus to ever list more than one entry for the same debt. Put the burden of accurate recordkeeping on the bureaus, because they are the only entities who have a responsibility for accurate recordkeeping and they are paid to keep accurate records.
Currently the cost of sloppy systems is externalized to both creditors and borrowers, both of whom tend to re-externalize it to other creditors and borrowers in the form of higher costs. It is irrelevant whether these dual entries are caused by negligence, incompetence, or malice on the part of the creditor or collector because it is the responsibility of the credit reporting agency to make this practice impossible.
Adding steep fines for double reporting would incentivize CRA's to police their systems so each debt only garners one entry. Since CRA's are immune from libel suits in most of the country regulatory oversight is especially important. Conversely, clarifying that reporting agencies are not immune from state libel laws -- that regulatory authority is in addition to state defamation law -- would also quickly incentivize more accurate reporting.
Yes, if the account is still open the bank must hold onto the agreement for 20 years. If the account went delinquent 20 years before litigation then the statute of limitations has long passed and the lawsuit is frivolous; it should be dismissed with sanctions.
michaelolenick
1
One theme we see throughout comments is that debt sold adds confusion as to whom is the creditor, and also triggers a new credit entry, making the debt appear as incremental (additional), when it is simply transferred, and fresh. The solution to this is simple; do not allow credit bureaus to ever list more than one entry for the same debt. Put the burden of accurate recordkeeping on the bureaus, because they are the only entities who have a responsibility for accurate recordkeeping and they are paid to keep accurate records. Currently the cost of sloppy systems is externalized to both creditors and borrowers, both of whom tend to re-externalize it to other creditors and borrowers in the form of higher costs. It is irrelevant whether these dual entries are caused by negligence, incompetence, or malice on the part of the creditor or collector because it is the responsibility of the credit reporting agency to make this practice impossible. Adding steep fines for double reporting would incentivize CRA's to police their systems so each debt only garners one entry. Since CRA's are immune from libel suits in most of the country regulatory oversight is especially important. Conversely, clarifying that reporting agencies are not immune from state libel laws -- that regulatory authority is in addition to state defamation law -- would also quickly incentivize more accurate reporting.
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michaelolenick
2
Yes, if the account is still open the bank must hold onto the agreement for 20 years. If the account went delinquent 20 years before litigation then the statute of limitations has long passed and the lawsuit is frivolous; it should be dismissed with sanctions.
View this comment in the discussion thread