Q: What, if anything, can be done about collection
agencies that report disputed accounts to credit bureaus then refuse to
remove them after receiving payment?
A: First, never make a payment without first validating the collection. Collection agencies buy and sell debt. A collection agency may purchase $10M worth of debt in one shot. Chances are they're not getting $10M worth of paperwork, too. According to the Fair Debt collection Practices Act, you have the right to request that they validate your debt. Among the items you may request are copies of the contracts you allegedly signed and your payment history as well. You may have already paid this debt they're trying to collect.
Second, don't make any type pf payment without first getting the terms of your agreement in writing. The agreement should state how much you're agreeing to pay and whether or not that amount satisfies your debt obligation. It should have a "good through" date, meaning the agreement should expire at some point in time. It should also be on their letterhead.
Finally, never send a personal check, give them a debit or credit card number, or send anything with your signature on it. While most collection agencies are legitimate, some will abuse your cooperation and attempt to collect more than what you had agreed by pasting your signature on another form or accessing your bank account for more money without your permission.
I recommend only sending bank checks by certified mail.
If you acquired a proper payoff statement which stipulated the collection would be deleted once payment was received by the good through date, you'd have a letter to send to the credit bureaus as proof that the item should've been deleted. Otherwise, the best you can do now is use the canceled check, assuming it was for the full amount owed, to prove your case.
This is exactly why I insist on handling your negotiations and payment arrangements for you, as well as instruct you to not speak with any collection agents, while you're a client of Score More Credit.
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