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DISCLAIMER: This article is based on a complaint. The defendant has not responded to the complaint to present its side of the case. The claims mentioned are accusations and should be considered as such until and unless proven otherwise.
A collection operation is facing claims it violated the Fair Credit Reporting Act and the Fair Debt Collection Practices Act for allegedly continuing to report a debt to the credit bureaus after the creditor had pulled the account back and after the consumer had settled it with a different collection agency.
The background: The claims center on what a furnisher does, or fails to do, once an account is no longer in its hands.
- The plaintiff owed $279 to a telecommunications provider for cellular service in 2025, and the creditor retained the defendant to collect. The defendant furnished information to the three nationwide credit reporting agencies stating the account was past due and in collection, according to the complaint.
- The creditor later withdrew the right to collect from the defendant and assigned the account to a different collection agency. The defendant was no longer assigned to the account at least as of February 2026 and should not have kept reporting it as open after the recall, according to the complaint.
- In April 2026, the plaintiff settled the account by paying the new agency, which acknowledged in writing that the account was settled.
- The plaintiff then discovered the defendant was still furnishing information to the agencies stating the account remained open and in collection, carried a balance and a past-due amount, and reflected a last-payment date from the prior July rather than the April settlement date, according to the complaint.
- The plaintiff disputed the information with the credit reporting agencies, which notified the defendant. The defendant allegedly failed to conduct a reasonable reinvestigation, not consulting the original creditor, not consulting the new agency, and not considering the documentation the plaintiff submitted, before reporting back that the information was accurate, according to the complaint.
- The inaccurate information remained in the plaintiff’s credit files, causing increased interest rates, a lost ability to raise a credit limit, wasted time and money, and emotional distress, according to the complaint.
The claims: The complaint accuses the defendant of violating Section 1681s-2(b) of the FCRA by failing to conduct a reasonable reinvestigation of the disputes after receiving notice from the credit reporting agencies.
- The complaint also accuses the defendant of violating Sections 1692e, 1692e(2)(A), 1692e(2)(B), 1692e(5), 1692f, and 1692f(1) of the FDCPA for its efforts tied to a debt that had already been paid and for reporting the account as open after it had been recalled.
