Consumer complaint received 2024-10-22
Product: Credit reporting or other personal consumer reports — Credit reporting
Issue: Problem with a company's investigation into an existing problem — Their investigation did not fix an error on your report
Company: Spring Oaks Capital, LLC (MI)

I am writing to dispute the accuracy and completeness of the Spring Oaks Capital account reported on my credit file. I previously requested validation of this debt, and Spring Oaks Capital provided a bill of sale that has been redacted, withholding the loan ID and purchase price. For legal debt collection, the creditor must be able to validate the debt. That includes providing proof that the loan was transferred and showing details that tie my specific alleged loan to Spring Oaks Capital. This redaction makes it impossible to prove that the debt was properly transferred and assigned to Spring Oaks Capital, that the company legally owns the debt, and that it has the right to collect it. 

There are also a few significant discrepancies in the reporting of this account directly violating FCRA 1681s-2 ( a ) ( 1 ) ( A ) which requires that the information reported to the credit bureaus must be accurate and complete. In a previous dispute, I filed a formal complaint with the Consumer Financial Protection Bureau ( CFPB ) regarding this alleged loan account with Upstart. In response to the complaint, XXXX indicated that they are no longer servicing the loan and deferred all responsibility for the investigation and reporting of the account to Spring Oaks Capital, totally dismissing and disregarding the inaccuracies in their reporting. Upstarts reporting is found to be significantly flawed and in violation of several federal laws, in which if ownership and rights to the account have been properly transferred, Spring Oaks Capital is obligated under the Fair Credit Reporting Act ( FCRA ) to ensure the accuracy of the reporting, conduct a thorough investigation into all inaccuracies and issues, and are to be held accountable for the violations of federal laws and regulations. Therefore, I, XXXX XXXX, hereby put the company Spring Oaks Capital on notice of the following inaccuracies of the account : 1. Incomplete Documentation : The redacted loan ID and purchase price fail to provide sufficient proof that the debt was properly transferred and assigned to Spring Oaks Capital, that the company legally owns the debt, and that it has the right to collect it.

2. Date of First Delinquency : Spring Oaks Capital must maintain the accurate and true date of first delinquency that is consistent with the reporting of the original creditor, as required by the Fair Credit Reporting Act ( FCRA ). It seems that Spring Oaks Capital has changed this date in an attempt to extend the reporting period constituting re-aging of the debt, which is prohibited under FCRA 1681c. Allowing the account to be inaccurately re-aged and reported as newer than it is also constitutes a failure to maintain the accuracy of my credit file negatively impacting my score and misleading lenders to believe that this account is a newer delinquency, which is often more harmful than an older one. This practice also violates Unfair, Deceptive, or Abusive Acts and Practices ( UDAP ) laws. By making the debt appear newer, Spring Oaks Capital is engaging in a deceptive practice designed to unfairly penalize me financially by extending the harm caused by the delinquency.

3. Inconsistent Reporting of Delinquency : XXXX reported the account as 90 days late in XX/XX/XXXX and then as charged off in XX/XX/XXXX. Charge-offs typically occur after a period of XXXX to XXXX days of delinquency. Reporting a charge-off one month after reporting 90 days late indicates they did not follow the standard charge-off guidelines in direct violation of federal regulations, including those issued by the Federal Reserve, the Office of the Comptroller of the Currency ( OCC ), and the Federal Deposit Insurance Corporation ( FDIC ) by suddenly accelerating the reporting timeline without valid justification.

4. Improper Charge-Off Timing : Given that a charge-off should typically occur after XXXX days of delinquency, the reporting by Upstart of a charge-off in XX/XX/XXXX, after 90 days late in XXXX, suggests that Upstart did not follow the standard industry practices. By reporting a charge-off after less than 120 days of delinquency, XXXX has violated accepted regulatory guidelines such as those outlined by the FFIEC.

5. Repetitive Charge-Off Reporting : XXXX has continuously reported the account as a charge-off month after month from XX/XX/XXXX through XX/XX/XXXX. A charge-off is a specific one-time event in which the creditor declares the debt uncollectable. The continued monthly charge-off reporting is misleading and inaccurately inflates the negative impact on my credit file, violating FCRA 1681c and 1681e ( b ), as well as FDCPA 1692e.

6. Double Reporting : Both the original creditor and Spring Oaks Capital are reporting delinquency for the same debt. This creates the appearance of multiple negative accounts, artificially inflates the negative impact on my credit, and indicates bad-faith collection practices if Spring Oaks attempts to collect on an improperly reported debt. Reporting the same debt multiple times by two entities violates FCRA 1681e ( b ), which requires information furnished to be accurate, and FDCPA 1692e, which prohibits misleading representation of the debt. 
7. Failure to Notify of Account Re-Addition : Between XXXX and XX/XX/XXXX, this account was removed from my credit report, only to be re-added without proper notification. Under FCRA 1681s-2 ( a ) ( 7 ), I should have been notified within 5 days of the re-addition. This failure to notify further indicates improper handling of my account, potential inaccurate reporting, and bad faith practices by Spring Oaks Capital. 

XXXX has violated multiple laws in their handling and transfer of the debt, raising doubts about whether Spring Oaks Capital has the right to pursue collection. By XXXX re-aging the debt, misreporting delinquency, and declaring charge off of the loan under questionable circumstances, Spring Oaks could be pursuing collection based on faulty or inaccurate information. This violates the Fair Credit Reporting Act ( FCRA ), which requires accurate and timely reporting of consumer information. Under FCRA 1681c, debts must be reported with accurate dates of delinquency and charge-off. Any deliberate re-aging of a debt ( to extend the time it stays on your credit report ) is a violation. If Spring Oaks is reporting this re-aged debt, they are misreporting the account. By continuing to use my personal information in an abusive and hostile manner to pursue an inaccurate debt, Spring Oaks Capital is also violating the FDCPA, which prohibits harassing, abusive, or deceptive practices in debt collection. 

Both XXXX and Spring Oaks Capital must adhere to FCRA requirements, which demand that all reported information must be accurate and complete. Given these inaccuracies and the continuous harm caused by the misrepresentation of the debt, I demand the following actions be taken within 15 days : Provide unredacted documents as part of the debt validation process. If your company can not provide these documents, then you have failed to properly validate the debt. 
Immediate deletion of the inaccurate account from all applicable credit reporting agencies including but not limited to XXXX, XXXX, and XXXX. 
Written confirmation that the account has been accurately removed. 
Monetary compensation check payable to XXXX XXXX in the minimum amount of $ XXXX {$8000.00} for each of the mentioned violations including damages for the negative impact this reporting has had on my financial standing and reputation as a financially responsible and creditworthy individual, financial losses such as credit card and loan denials which would have prevented financial strain and improved my financial situation, rental application denials stalling and minimizing housing opportunities, ridiculously high interest rates on car loans, all in which referred to Severe level of charge-offs and too many recent collections as the reasoning, in addition to the cost of resources expended in the disputing of this account, as allowed under FCRA Section 616 .

Reimbursement of any legal fees incurred if this matter proceeds further.

In addition, if the company deems the reporting of the account as accurate, I am requesting a transparent and detailed explanation of how the documentation meets the legal requirements for accurate and complete reporting under the FDCPA and FCRA along with the following from each person ( s ) involved in the investigation : name ( s ), company position, contact information ( address, emails, and/or phone numbers ), dates of verification, and description of the verification process for each inaccuracy. I expect that you will conduct a thorough investigation addressing the inaccuracies without deferring back to XXXX, as they have made it clear in their CFPB response that you, Spring Oaks Capital, are responsible for this account.

While I am fully prepared to pursue my rights under the Fair Credit Reporting Act ( FCRA ) and the Fair Debt Collection Practices Act ( FDCPA ), I would prefer to resolve this matter outside of court. I believe that settling would be in the best interest of all parties involved and could avoid unnecessary legal costs and proceedings. 

I kindly request your response within 15 days from the date of this letter to confirm your willingness to cooperate, the deletion of this account, and financial compensation. Failure to promptly address this issue or any attempts to delay compliance will be interpreted as stalling tactics. This will leave me with no choice but to pursue legal action for damages and report the matter to the appropriate regulatory authorities.