The CFPB’s Fall 2014 supervisory highlights, covering supervisory activity between March and June, points to failings by student loan servicers and debt collectors. The highlights identified six failings by student loan servicers, including misleading statements to consumers and telephone harassment. Debt collectors’ misconduct included charging illegal convenience fees to consumers paying by credit card, false threats of litigation and improper disclosure to third parties.
On September 16, 2014, The CFPB announced that it would sue Corinthian Colleges, which runs over 100 school campuses for falsely advertising of job prospects and illegal debt collection practices. CFPB has issued this notice to past and current students. The CFPB’s complaint is here.Read More »The CFPB’s Action Against Corinthian Colleges, Inc.
September 26, 2014
This report from the National Consumer Law Center examines the consequences of the Department of Education’s outsourcing of student loan collections to private debt collectors. The report reveals that the Department of Education does little to protect its borrowers from debt collection abuse, and points out that in some respects, the way the DOE pays collectors positively encourages abuses.Read More »National Consumer Law Center Report: Pounding Student Loan Borrowers
September 20, 2014
In many private student loan cases in Maryland (as well as in other cases), the collection lawyer will argue that the statute of limitations is 12 years instead of 3 years. The reason, they argue, is that many private student loan contracts are “contracts under seal.” Lately I have seen a spate of private student loan contracts where the word “SEAL” does not appear anywhere on or near the signature line, and despite this absence, collection lawyers argue that it is still a contract under seal. Maryland law seems clear that absent the word “SEAL” next to or near the signature, there is not a “contract under seal” and thus there is not a 12 year statute of limitations.Read More »Is Your Private Student Loan A Contract Under Seal?