Thursday, January 19, 2017

Debt Collecting Leeches

Student Loan Collector Cheated Millions:

Navient, the nation’s largest servicer of student loans, has for years misled borrowers and made serious mistakes at nearly every step of the collections process, illegally driving up loan repayment costs for millions of borrowers, according to lawsuits filed on Wednesday by a federal regulator and two state attorneys general.
Navient handles $300 billion in private and federal loans for some 12 million people — touching about one in four student loan borrowers. Every customer may have been affected by Navient’s misdeeds, said Lisa Madigan, the attorney general of Illinois, announcing her own lawsuit with the one filed by the Consumer Financial Protection Bureau.
Navient does not make the loans, but it holds lucrative contracts to collect payments each month on behalf of banks, government and other lenders.
The damages sought could reach billions of dollars, said Ms. Madigan, who sued Navient and Sallie Mae — which split into the two companies in 2014. Washington State’s attorney general, Bob Ferguson, filed a similar lawsuit against both companies.
The lawsuits describe routine mistakes and lapses in oversight that over time added up to systematic failures, eerily similar to the mortgage servicing industry’s bungling of borrower accounts and property foreclosures during the 2008 recession. Financial companies eventually paid more than $100 billion to settle mortgage-related lawsuits.
Navient mishandled loan payments, buried critical information in fine print and set obstacles for borrowers trying to release co-signers from their loans, among other failings, according to the consumer bureau’s legal filing.
Unfortunately, it's a civil case rather than a criminal case, where frankly the executives of this company, and the cockroaches they hire as employees, belong behind bars.
Navient, which plans to fight the lawsuits, denied all wrongdoing.
“The allegations of the Consumer Financial Protection Bureau are unfounded, and the timing of this lawsuit — midnight action filed on the eve of a new administration — reflects their political motivations,” Patricia Nash Christel, a company spokeswoman, said in a written statement. “We will vigorously defend against these false allegations.”
Snicker. As only a "debt collection" agency might.
Navient is accused of deliberately steering borrowers away from income-based repayment plans that could have lowered their loan costs — in order to maximize its own profits. Enrolling customers in such plans can be time-consuming and complex, and Navient’s compensation system for its customer service representatives encouraged them to push struggling customers toward other options, according to the bureau’s complaint.
Derek Smith said he is one such borrower. In 2011, when his loan payments kicked in, he was living in a homeless shelter in Boston. He had no job and three children.
Mr. Smith was exactly the kind of former student who should have had his payments reduced, according to Persis Yu, director of the Student Loan Borrower Assistance Project at the National Consumer Law Center. But that never happened, she said. After struggling for two years to make a dent on his loans, Mr. Smith defaulted and his wages from a new job were garnished. Collection calls poured in.

“I was just at a standstill,” said Mr. Smith, whose debt has ballooned to more than $13,000.
Navient declined to comment on Mr. Smith’s case, but said it was “a leader in enrolling eligible borrowers into income-driven repayment programs.”
LOL...even if that means chasing you down to the bridge you're living under and stealing your pennies. 

The Smith case is just one of hundreds illustrated in the complaint, which I would strongly encourage you to read, but it illustrates the larger point I've made for years about these debt collection companies, their employees, and the executives who run them: civil suits are a great start, but prison is where these vermin belong.

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