Consumer complaint received 2024-12-15 00:00:00
Product: Credit reporting or other personal consumer reports — Credit reporting
Issue: Incorrect information on your report — Account status incorrect
Company: FREEDOM FINANCIAL NETWORK
State: FL

Complaint narrative:
I am writing to lodge a formal complaint and request an investigation regarding a charged-off account, ACCOUNT NAME : ACHIEVEPL, ACCOUNT # : XXXX inaccurately reported by a creditor. Specifically, the creditor has unlawfully reported a charged-off account while simultaneously reflecting a balance on my credit report. This reporting practice violates my rights under federal law, including the Internal Revenue Code ( Title 26 ) and the Fair Credit Reporting Act ( FCRA ). Furthermore, I have not received a 1099-C from the creditor, which is required when debt is canceled, discharged, or otherwise written off. 

B

asis for Complaint Failure to Issue 1099-C as Required by IRC 6050P Under the Internal Revenue Code ( IRC 6050P ), a creditor is obligated to issue a Form 1099-C when a debt of {$600.00} or more is canceled or charged off. The absence of a 1099-C creates ambiguity about the legal status of the account. It is a clear indication of noncompliance with federal tax reporting requirements and calls into question the validity of the continued reporting of any balance. Inconsistent Reporting of a Charged-Off Account By reporting the account as " charged-off '' while still reflecting a balance, the creditor is engaging in inconsistent and inaccurate reporting. A " charge-off '' designation signifies that the creditor has written off the debt as uncollectible and ceased collection activities. Therefore, any balance reported is misleading and violates the accuracy standards required under the Fair Credit Reporting Act ( 15 U.S.C. 1681e ( b ) ). 

Court Precedent : XXXX XXXX XXXX XXXX XXXX Bank In XXXX XXXX XXXX XXXX XXXX XXXX, the court held that once a debt is charged off, it can not simultaneously remain active for reporting purposes or accrue interest. This precedent underscores that reporting a charged-off debt with a balance constitutes a misrepresentation of the debt 's legal status and harms the consumers creditworthiness. 

Violations of Law IRC 6050P requires creditors to issue a Form 1099-C for debts deemed canceled, charged-off, or discharged. The failure to comply violates federal tax law. 

FCRA ( 15 U.S.C. 1681e ( b ) ) mandates that information furnished to credit reporting agencies must be accurate and not misleading. The continued reporting of a balance on a charged-off account is inconsistent, inaccurate, and unlawful. 

Requested Actions I respectfully request that the CFPB : Investigate the creditors noncompliance with IRC 6050P, particularly the failure to issue a Form 1099-C ; Require the creditor to clarify the legal status of the charged-off account and correct any inaccurate reporting ; Direct the creditor and credit reporting agencies to remove the charged-off account and balance from my credit report ; Enforce compliance with the FCRA and federal tax laws to prevent further violations of my rights. 

Supporting Documentation I have attached all supporting documentation, including account statements and any relevant correspondence, to substantiate my complaint. 

Conclusion The inaccurate reporting of a charged-off account with an outstanding balance violates federal law and my rights as a consumer. The absence of a 1099-C further demonstrates the creditors failure to adhere to legal requirements under the Internal Revenue Code. I urge the CFPB to investigate this matter promptly and take all necessary actions to ensure compliance with federal law. 

Sincerely, XXXX : XXXX

Company response to consumer: Closed with explanation