If you have ever been late on a student loan payment, then you know that the Department of Education uses collection agencies to collect its debts just like any other company. If you have ever been the recipient of student loan collection efforts, then you know that collection agencies can be pretty ruthless in their attempts to collect these debts, most likely because they are working for the government. After numerous complaints regarding collection tactics, the U.S. Department of Education finally publicly cuts ties with at least 5 of its contracted collection agencies for behavior inconsistent with the Fair Debt Collection Practices Act (“FDCPA”).
In an announcement, the Department stated that it would cut ties with Coast Professional, Enterprise Recovery Systems, National Recoveries, Pioneer Credit Recovery and West Asset Management after receiving information that these collection agencies were regularly violating the FDCPA. After conducing a review of these agencies, the Department discovered the agencies were providing inaccurate information to debtors about their loans and offering unacceptably high interest rates. The agencies were misleading debtors about allegedly waiving fees and about the state of their credit report after payment was made on their loans.
When reaching out to debtors to collect on their loans, these five agencies were providing misleading information about waiving fees on a student loan rehabilitation program that the Department of Education was offering which can provide benefits to a select number of students who had defaulted on payment of their loans. The Department stated it will reassign debtors who were assigned to any one the five collection agencies to a new agency for collection. Further, the Department will put a new monitoring system into effect to police the collection efforts of all agencies in its employ and it will closely monitor any debtors who were initially placed with the agencies that are no longer collecting on the Department’s behalf.
Simply because consumers owe a debt to the government does not mean they deserve unfair treatment. The FDCPA applies to all consumer collection efforts and no collector should be permitted to violate a consumer’s rights. If you believe your rights have been violated under the FDCPA and you would like a free case review contact SmithMarco P.C. to speak with licensed attorney.