Consumer complaint received 2025-04-06 00:00:00
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: EQUIFAX, INC.
State: TX

Complaint narrative:
I am filing this formal complaint against TransUnion, LLC for its willful misconduct, failure to initiate arbitration, and its continued, inaccurate reporting of a debt that is legally no longer owed.

Summary of the Issue : TransUnion continues to report a debt on my credit file that has been legally extinguished by the issuance of an IRS Form 1099-C ( Cancellation of Debt ). Under IRS Code 6050P, a creditor who files a 1099-C is acknowledging the discharge of a debt and has, by law, given up their right to collect on it. As per the Internal Revenue Manual ( IRM ) 25.1.7.2, the issuance of a 1099-C is considered a cancellation of debt, and the creditor is effectively prohibited from further collection activity.

Once a 1099-C is filed and submitted to the IRS, the debt is no longer legally owed. Continued reporting of the debt constitutes a factual inaccuracy and potential fraud, particularly if done knowingly after notice has been provided. 

Timeline and Evidence : On XX/XX/XXXX, I sent a certified letter to TransUnion addressed to their General Counsel with a demand for arbitration, as permitted by TransUnions Consumer Disclosure policies and their own Arbitration Clause. 

My letter was received by TransUnion on XX/XX/XXXX, as confirmed by USPS tracking.

Included in that letter was a copy of the IRS Form 1099-C proving the debt in question had been cancelled and should no longer be reported.

Instead of initiating the arbitration process, TransUnion deliberately mischaracterized my arbitration demand as a standard dispute, thereby evading their legal obligations under the Federal Arbitration Act ( FAA ) and their own binding arbitration agreement. 

TransUnion failed to initiate arbitration, refused to acknowledge the legal cancellation of the debt, and continued to report the debt as valid. 

No proper investigation was conducted under the Fair Credit Reporting Act ( FCRA ) 15 U.S.C. 1681i ( a ), which mandates a reasonable reinvestigation when a consumer notifies the agency of an inaccuracy.

This mischaracterization and subsequent inaction are not mere errorsthey demonstrate willful neglect and bad faith. 

Supporting Case Law : In XXXX XXXX XXXX XXXX XXXX, XXXX, XXXX XXXX XXXX ( XXXX XXXX. XXXX ), the court acknowledged that a consumer reporting agency can be held liable under the FCRA if it fails to conduct a reasonable investigation of disputed information. The continued reporting of a discharged debt, especially after proper notice and supporting documentation like a 1099-C has been provided, fits squarely within this precedent. 

Additional Concerns XXXX and XXXX : XXXX actions also raise serious concerns under 18 U.S.C. 19611968 ( RICO Act ). The willful and knowing false representation of a legally extinguished debt as valid constitutes a pattern of racketeering activity. This misreporting may also constitute credit slander and fraud, especially when performed with intent after notice and documentation were properly provided.

According to the IRS, it is considered fraudulent for a lender or any party to treat a cancelled debt ( post-1099-C ) as still collectible or reportable. TransUnions continued reporting of this debt is tantamount to a conspiracy to defraud.

Relief Requested : That TransUnion be compelled to initiate arbitration, as originally demanded.

That TransUnion immediately cease reporting the cancelled debt on my credit report.

That TransUnion be investigated for possible violations of the Fair Credit Reporting Act ( FCRA ) and potential fraud under federal law.

That TransUnions internal handling of arbitration requests and certified documentation be reviewed for compliance with their legal obligations.

Attached to this complaint is proof of delivery of the certified letter, a copy of the 1099-C, and the original arbitration demand sent to TransUnion.

Company response to consumer: Closed with explanation