CFPB busts Debt Collectors

CFPB busts Debt Collectors

by Feb 7, 2022Student Loans0 comments

CFPB busts Debt Collectors for Collecting on Student Loans

Alarming Headline about Student loan Debt states, “Consumers made payments of at least $3.5 million on debt they did not owe.”

We receive daily alerts from the Consumer Finance Protection Bureau about the things happening in the finance world. Some good, some bad, some downright frightening. 

We need the Consumer Finance Protection Bureau for many reasons. 

  • Do you have a student loan? I do! 
  • Are you currently repaying your student loans? Or are they in default? 
  • Do you know whom you are paying back and how much you are spending?

The article that the Consumer Finance Protection Bureau republished from Reuter’s website states – “The US consumer financial watchdog on Monday ordered National College Student Loan Trusts and its debt collector, Transworld Systems Inc, to pay at least $21.6 million for attempting to collect on possibly non-existent or out-of-date loans.”

What happened here? 

These bottom-feeder debt collectors thrived on collecting invalid student loan debt. 

How did this happen? 

The Consumer Financial Protection Bureau alleged that the companies sued borrowers without being able to prove the debt was owed. They also pursued collection on loans that were too old to sue over and relied on false and misleading legal documents. The CFPB said the trusts had filed at least 486 lawsuits on debt where the statute of limitations for collections had expired. As a result, consumers made payments of at least $3.5 million on debt they did not owe, the CFPB said.”

This investigation was three years in the words and was for private, not federal, student loans. If you have student loans – be very careful. If you recognize this debt collector’s name— investigate how you too might have been affected by the process.

For the full article – check out Reuter’s website.

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