Consumer complaint received 2025-02-04 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: Regional Management Corporation
State: AL

Complaint narrative:
I am writing to file a formal complaint against Regional Finance regarding their improper handling of a charged-off account that is still being reported on my credit reports, despite the fact that the account was written off and reported as such by the company. I believe that Regional Finance is in violation of the IRS guidelines and several consumer protection laws, including the Fair Credit Reporting Act ( FCRA ) and the Fair Debt Collection Practices Act ( FDCPA ). Their actions are not only unlawful but damaging to my financial future. I request immediate intervention by the CFPB to address this issue. 
Account Information : Account Name : Regional Finance Account Number : XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX Original Balance : {$2500.00} Terms : 36 months On Record Until : XX/XX/XXXX Grounds for Complaint : Failure to Report a 1099-C After Write-Off : According to IRS guidelines, when a debt is written off by a lender, the company is required to file a Form 1099-C if the amount of debt forgiven is {$600.00} or more. The IRS treats canceled debt as income, and this income must be reported to the debtor via a 1099-C. Regional Finance has failed to send me this necessary form for the {$2200.00} they wrote off in relation to this account. This is a clear violation of the IRS tax code, specifically 26 U.S. Code 108, which requires that canceled debt is treated as income.

Improper Reporting of Canceled Debt : Despite the cancellation of debt, Regional Finance is still reporting this account as a charged off account on my credit report. This is a violation of both IRS tax laws and the Fair Credit Reporting Act ( FCRA ). Income that arises from a canceled debt should never appear on a consumer credit report because it is not considered an outstanding balance. It is income that should be reported via a 1099-C, and it is illegal to continue reporting a canceled debt as past due after it has been written off.

This is not only an error but an unlawful action that misleads potential creditors and employers, damages my credit score, and creates undue financial hardship. Reporting income as debt is a direct violation of the FCRAs provisions on inaccurate reporting and fair reporting ( 15 U.S.C. 1681s-2 ). This has led to significant harm to my credit profile and my ability to access future credit.

Violation of Consumer Protection Laws : Regional Finances failure to follow the IRS guidelines and its continued reporting of written-off debt on my credit report constitutes a violation of the Fair Debt Collection Practices Act ( FDCPA ) as well. Under the FDCPA, a debt collector is prohibited from reporting inaccurate information about a debt, and continuing to report a canceled debt as if it is an outstanding liability violates the law. The FDCPA mandates that the information reported is accurate and timely, and continuing to include written-off debt as a liability is both misleading and unlawful. 

Legal Violations and Requested Action : Violation of IRS Tax Code : Regional Finance is required by law to issue a 1099-C form for the canceled debt, and they have failed to do so.

Violation of the Fair Credit Reporting Act ( FCRA ) : They are continuing to report a written-off account as past due, which violates the law regarding accurate and fair credit reporting. 
Violation of the Fair Debt Collection Practices Act ( FDCPA ) : They have engaged in misleading reporting practices, failing to correct inaccurate information about the status of the account.

Company response to consumer: Closed with explanation