We just reported on Friday about a major lawsuit won against a student loan servicer. Now, we have another case to report on. The New York Attorney General Letitia James reports a major victory against ACS Education Services. The New York AG sued ACS for being dishonest with customers about student loan repayment programs.
More specifically, they were preventing students from seeking avenues that make it easier for them to pay back their debt. ACS Education Services has changed their name to Conduent Education Services, LLC. Before then, they were known as Xerox Education Services. It’s incredibly telling when the company has to change its name several times while fighting off fraudulent charges.
When people are bogged down by student loan payments, they seek out ways to help them out. Maybe it’s signing up for the PAYE or REPAYE repayment programs that cut down the monthly payments. It can also be the Public Service Loan Forgiveness Program. The PSLF offers full student loan forgiveness to public service workers with 10 years of qualifying payments.
Rather than helping struggling people to pay off their student loan debt, they chose deception and greed. They stand accused of purposely misleading students about their options. They were steered away from those programs and lied to about whether they would qualify for PSLF. All for greedy hands who wanted to collect more money.
Deceptive Student Loan Practices by Conduent
The New York Attorney General investigated the claims of fraudulent activity by Conduent. They found all sorts of dirty laundry that includes:
• Convincing borrowers to go into forbearance when they needed an income-driven plan.
• Lied to students, including servicemembers, about qualifying for PLSF
• Delaying student loan borrower’s attempts at consolidating their loans
• Failed to process IBR applications
• Gave borrowers wrong information about payment to maximize late fees
• Misapplied payments made
• Misreported information to credit reporting agencies
• Improperly calculated a new interest rate for servicemembers who qualify for the Servicemember Civil Relief Act
• Charged late fees improperly
There’s more to it, but this is the gist. As a result, Conduent is to pay a civil penalty of $1 million to New York state. Another $8 million will be paid in restitution to those who are hurting by this company’s lies. They also have to agree not to service another student loan for at least 5 years.
A Response to the Lawsuit
Director of External Communications at Conduent, Neil Franz, has a response to the lawsuit and agreement.
“We have entered into a settlement agreement with the New York State Attorney General’s Office and the New York Department of Financial Services stemming from investigations initiated in 2014 and 2015, prior to Conduent’s separation from Xerox Corporation,” he said.
http://financialhelpers.com/lawsuit-erases-490-million-worth-of-student-debt/
“The investigation centered on loan servicing activities going back into the 1990s. As previously communicated in our public disclosures, the company decided to exit the student loan servicing business and completed its exit from this business in October 2018. The company, which has neither admitted nor denied liability, is pleased to put these legacy issues behind it.”
At the end of the day, Conduent is yet another fraudulent student loan servicer caught in the act. There’s a wind of change happening. As student loan debt continues to grow, there’s no relief in sight. But, as long as more deceptive companies are caught, we’re getting closer to resolving the issue.
