No. of Recommendations: 3

You wrote, Thank you so very much for your detailed response! It was my bad not to mention more details about the incorrect listing on my CR. This is from a credit card that I had opened way back in 2000/2001 time frame. The card was issued by Associates Bank, which I believe was later acquired by Citi. The credit limit for this card was $300, but in the highest balance the CR shows an amount of $676. This is what I'm furious about because I cancelled the card without ever using it and also within a time frame of less than a month after receiving it.

So this opens up another can of worms, if I applied for it in 2000/2001 why would it show up on my account till 2016? I thought the time frame for showing closed/active accounts is 10 years? Could it be possible that since Associates was acquired by another bank they somehow screwed up the listing?

There is no official time limit for showing closed/inactive account information. Only derogatory trade lines must be purged after 7 years. I believe you are right though, CRAs do tend to drop records of closed accounts after some period such as 10 years; but that's at the CRA's discretion. (Though sometimes you can make it happen yourself if you can get the creditor to agree to not report any account history and you then file a dispute with the CRA. If the creditor doesn't respond, the CRA must remove the account entirely.)

It actually sounds like Associates Bank was claiming that you never closed the account - or that they re-opened the account for some unexplained reason. If the account had some kind of usurious account terms, such as a monthly maintenance fee, that might explain the high balance reported. The account might have been re-opened without your knowledge and then hit with fees. I'm sure they eventually wrote the account off and/or credited the account for the fees.

In any case, I'm not sure the high balance on a closed/paid account has much if any impact on your current credit score.

However, I can understand why you might be upset. In the 1990's, I applied for a Gold Visa card ($5,000+ credit limit) from Providian Bank that had a no fee, 0% balance transfer offer on it. The pre-screened application was in writing and mailed to them and I kept a copy. A month later I received some punitive sub-prime piece of crap in the mail with a $300 credit limit and an annual fee. I called and was pretty upset with them. The CSR claimed that it was an innocent mistake. I'd reported my monthly income (~$4,200/month) and she claimed they mistook it as my annual income. I was consoled briefly by this. However, when I pulled the application, it was clearly marked. Also, I wondered why on earth would they give any credit to someone making $4,200/year?!

In any case, she told me to shred the card and they would send me a Gold card. When it arrived, I found that Providian's terms were still fairly punitive and it had no grace period. When I called, they said that yes I could do a balance transfer - if I paid some 3 or 4% fee and paid the cash-advance rate of like 28%. Needless to say, I was pretty furious. I told the CSR to close the account and that I didn't want to hear from them again. I was particularly upset because now they were going to report not one, but two recently closed accounts and associated hard inquiries on my report.

Well, I never did hear from them again - at least not directly. Later when I pulled my report before refinancing my house, I discovered I had an open account with Providian. I filed a dispute with the CRAs and contacted Providian. The CSR didn't understand why my account was reporting open, but hey! It was in good standing, and I appear to have been an excellent customer! (Her words, not mine.) I told her to close it and that I didn't want to see that account on my credit report again. Yes, I did get another copy of the report from the CRAs and the account was marked closed.

A few years later I refinanced again. Guess what? The account was open again. I went through the same thing with them. Some time later Providian was investigated for cooking their books. A large part of that was for re-opening customer accounts. The accounts would sit on their books unused. This increased their ratio of performing to non-performing accounts, which made their account portfolio seem more attractive to investors. Providian was sued by both common stock holders and bond investors. Their share price tanked. No one would lend them money. Washington Mutual eventually picked up their operations for a song - not that I'm saying it was worth even that.

I don't know that my account was involved in some conspiracy. But the limited evidence I had suggests it was. From my narrow view Providian was committing fraud on both customers and investors. It could have been some bad apples and over all the bank was a responsible lender. But in Providian's case, history suggests the fraud was probably systemic.

I'm not saying that what happened to you or Associates Bank was the result of systemic fraud. But I am saying that these things do happen either through mistake or fraud.

Finally, I have to ask about this "Associates Bank". You say you applied for credit with them in 2000/2001 and they apparently were later acquired by Citi. You must be referring to The Associates (Associates First Capital Corporation), which was a very egregiousness subprime lender that was acquired in November 2000 by Citigroup. ( )

Citigroup settled an FTC investigation against The Associates by agreeing to repay customers some $240M. Most of these complaints involved mortgage fraud; but perhaps you should also file a complaint with the FTC to see if anything comes of it.

- Joel
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