Creditor agreed to remove charge-off then reported to credit bureaus anyway

If you are successful in getting a creditor to remove a charge-off, make sure you get the agreement in writing as your proof. Once the agreement is in writing, you can have it enforced.

Question: I recently had a card go to a charge off. I had been very diligent at keeping the bill below 180 days. I called into to set up my December payment and was told it was due Dec 25 which the agent set up for me. Upon logging in to set up my January payment, I found the account had been charged off.

I called and was told that they do not post or run payments on the 25th of December. I explained that was set up by their CSR. They researched my claim and came back on the line to tell me I was correct that it was not “my fault” that the debt was charged off. They were offering to remove a charge-off and any history of this card from my account. She assured me this would no longer be in my credit history.

I made sure and have the agent I repeat herself and she said I would receive such correspondence in the mail, which I did. Now 2 weeks after the first letter, I have received a second letter from CC company stating that they have investigated my claim of a dispute and have found that their information is correct and the late status and charge off will remain on my credit report. Obviously I will be calling them, but was hoping for some experienced guidance for when I do call.

At this point, I would stay off the phone. Not that you’ve done anything wrong, but now is the time to create a paper trail through letter correspondence. You cannot depend on the word of a representative over the phone.

The good news is that the conversation where the rep informed you they would remove the charge-off and account history is memorialized in the letter mailed to you. You negotiated something most people find it difficult to do — get a creditor to remove a charge-off; now you just need to follow-through.

As I see it there are two ways you can approach this:

  • Dispute the charge-off directly with the credit bureaus, attaching the first letter as your proof the creditor agreed to delete the charge-off and account history. But there may be a problem with this approach, the creditor can disregard their first decision and verify the current charge-off reporting as accurate.
  • A better way to approach this would be to make a complaint with the Consumer Financial Protection Bureau. Lay out your complaint exactly like you have in your question. It’s a great summary of the events that occurred. I would highlight the main issues: (1) The creditor failed to inform you that the payment would not be processed in a timely manner due to the holidays; and (2) The creditor acknowledged their mistake and made an agreement, in writing, to remove a charge-off and account history and (3) You want the charge-off and account history deleted. Submit the 1st letter from the creditor as documented proof. You can upload it online at the CFPB when you submit your complaint.

The CFPB has up to 15 days to resolve a matter. They are pretty reliable in fighting on the consumer’s behalf.

 

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