What New York Consumers Should Know About the Recent Consumer Financial Protection Bureau Victory Over Two Student Loan Companies

Some New York consumers with student loan debt may be affected by the recent CFPB victory over two student loan companies.

A lot of New York consumers with student loan debt have closely followed a recent lawsuit filed by the Consumer Financial Protection Bureau (CFPB). The consumer watchdog group sued National Collegiate Student Loan Trusts and their collection agency, Transworld Systems Inc. (TSI). These student loan companies were charged with illegal debt collection practices. Namely, the CFPB acquired evidence that National Collegiate could not show proof of ownership for many of the student loan debts collected by TSI. In addition, Transworld employees signed sworn affidavits claiming that they reviewed account records that did not exist. Now, under the settlement reached, TSI must pay a $2.5 million penalty to the CFPB. For their part, National Collegiate will pay $7.8 million to the CFPB’s civil penalty fund, $7.8 million to the U.S. treasure, and at least $3.5 million to more than 2,000 consumers who were wrongfully sued over student loan debts.

What the National Collegiate and Transworld Settlement Means for New York Consumers with Student Loan Debt

Some New York consumers who made payments to National Collegiate are eligible to receive restitution from the settlement. According to the settlement terms, National Collegiate will contact them individually. Of course, no one in New York with a student loan through National Collegiate should automatically stop making payments. Instead, they should know a few details about the terms and conditions of the company’s settlement with the CFPB.

  • Moving forward, National Collegiate must hire an independent auditor to review every student loan.
  • If this auditor finds that any of these student loans lacks ownership documentation, National Collegiate may not collect on these loans.
  • If the company is already collecting on non-verifiable student loans, these efforts must cease, and National Collegiate must also pay restitution.
  • Both National Collegiate and Transworld may not sue student loan debtors without supporting documentation. They may also not report student loan debt to the credit bureaus if they cannot provide proof of loan ownership.

New York consumers who feel that their student loans were mishandled by National Collegiate should contact a consumer rights attorney. Individuals contacted by Transworld who don’t actually owe a student loan debt should also seek legal counsel.

How New York Consumers Should Handle Student Loan Debt Collector Harassment

Regardless of whether you owe student loan debt or not, there are certain tactics that student loan debt collectors may not use. A federal statute called the Fair Debt Collections Practices Act (FDCPA) protects New York consumers against abusive debt collectors. For example, in pursuing a debt, debt collection agents may not resort to any of the following actions.

  • Calling consumers at unreasonable hours.
  • Talking to family members, neighbors, or co-workers about their student loan debt.
  • Threatening consumers with actions that they cannot or will not take, such as throwing them in jail or confiscating their property.
  • Verbally abusing, swearing, or yelling at consumers.

Any New York resident who experiences any of the above actions from student loan debt collectors has the right to make the harassment stop. Just call Credit Repair Lawyers of America in New York. When you contact our firm, an experienced FDCPA attorney will stop the abuse for FREE. There is even a chance that you will collect damages from the offending debt collection agency.

Stop Debt Collector Harassment in New York

Don’t put up with abusive debt collectors. At Credit Repair Lawyers of America, we’ve been ending debt collector harassment and cleaning up credit reports for consumers since 2008 for free. How do we do it? All of our fees come from the defendants in settled cases. This is why our clients pay nothing for the work we do.

Let’s start the conversation about what we can do for your credit. Set up your free consultation today by calling Attorney Carl Schwartz at (646) 859-3045 or sending him a message through our contact page.

For more information about Stopping Debt Collector Harassment for Free, please visit https://www.creditrepairlawyersam.com/new-york/stop-debt-collectors/.