Can a Verizon Wireless account report a charge-off if deposit covered ETF

verizon-charge-off-etf-deposit

A Verizon Wireless account with a deposit doesn’t always cover unpaid account balances and early termination fees (ETF). It’s best to get a full accounting before assuming your deposit will cover account balance, fees and costs.

Question: Hi Lisa, I hope you are still responding to people. I opened a Verizon Wireless account in 11/2011. Because of my lack of credit history at the time, I had to leave a $400 deposit to open the account, which I did. I left Verizon about a year later, and knew there would be an ETF (early termination fee), which my deposit should have covered.

Shortly after I left Verizon, I received a letter from a collection agency for a $404 balance. I tried to resolve the matter through BBB. Verizon Wireless claimed to have refunded me my deposit, making that full balance due. I did not recall them doing so.

Ever since, a new collection agency sends me a letter nearly every month trying to recoup payment, ranging from various amounts, the most recent being $100. Upon checking my reports from all three agencies, only one has something on it regarding this matter. It is a charge off for $404 and the lender is Verizon, not a collection agency. There are no collections on my three reports, and the Verizon charge off is only mentioned on one of them. Theres three dates on it:

Date of first delinquency: 5/1/13
Date reported: 7/31/15
Delinquency first reported: 6/1/15

My question is, how do I go about removing this charge off on one of my reports? Should I dispute the charge off with the agency, citing my deposit? (I still have the receipt from making that deposit). Should I try PFD with Verizon? Will paying the collection agency yield anything? Or should I simply continue to wait until it drops off and not wake a sleeping beast, so to speak?

One thing I’m extremely confused about are the dates. When has the clock began on the 7 years for drop off? What does “date reported” mean, anyway? And what does “delinquency first reported” mean? Do those dates have something to do with the collection agencies, because the only creditor listed is Verizon Wireless account. Thank you, I really appreciate your time, I have a learned a lot from reading your replies.

Response: When disputing a tradeline on credit reports, you always run the risk of “waking the beast” or what some refer to as “poking the bear.” That’s just one of the pitfalls in credit disputes in general and, disputing charge-offs specifically. When a dispute is verified by the creditor, the account is updated to the date of last activity. And, unfortunately, the FICO scoring system views the new dates as recent negative information which may cause a decrease in credit score.

You have several ways to approach this issue:

  • Documentation can make the difference in a credit dispute. If you maintain the EFT was or should have been covered by your deposit, then dispute the negative listing providing your proof.
  • A pay for delete offer negotiated directly with Verizon would probably be your best option since it will definitely get rid of the debt and the negative listing, once and for all.
  • Paying the collection agency doesn’t seem the best action to take because you say they are not reporting to the credit bureaus. Paying them may actually cause them to report a paid collection on your credit reports.
  • The 7-year reporting time period begins the date you first became and thereafter remained delinquent up to the time Verizon charged-off the account.
  • You state no collection agencies have reported the debt to the credit bureaus, therefore, the dates on the credit report must be from Verizon.

Date of first delinquency: 5/1/13 – You can find information on date of first delinquency here. The 7-year period is based on when the delinquency occurred. Essentially it’s the first date you became delinquent (5/1/13), no payments were made, which then led to the account being charged-off.

Delinquency first reported: 6/1/15 – Verizon is not like a regular tradeline that reports monthly to the credit bureaus. This is likely the date Verizon reported the debt to the credit bureaus.

Date reported: 7/31/15 – The date Verizon reported the charge-off information (exclusion date) to the credit bureaus. Once Verizon reports a charged-off debt to the credit bureaus, FCRA Section 623(a)(5) requires the creditor to report the date of first delinquency (DOFD) to the credit bureaus within 90 days after their reporting (6/1/15) that they have taken a charge-off. The DOFD is used by the credit bureaus to then determine the exclusion date (7 years from 5/1/13) the charge-off will be removed from your credit report.

 

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