National Collegiate Student Loan Trusts Gets Slammed by Consumer Financial Protection Bureau

TL;DR

The Consumer Financial Protection Bureau is taking action against National Collegiate Student Loan Trust for suing consumers for debts that they cannot prove are owed.

Transcript

• Hey everybody, John Skiba here from the Arizona Consumer Law Group. I'm also the founder of The Consumer Warrior Project, which is designed to assist people, with giving them information as they deal with major debt issues. You can learn more about that over at consumerwarrior.com. In today's video, I wanted to talk about a recent press release i... Read More

Key Insights

• ❓ The CFPB is responsible for protecting consumers from unfair practices by financial institutions.
• 👍 National Collegiate Student Loan Trust is accused of suing consumers for debts they cannot prove.
• 🖤 Their reliance on Transworld Systems for affidavits complicates the situation, as the individuals testifying may lack personal knowledge.
• ❓ The proposed judgment includes measures to address the issues, such as an audit, restitution, and penalties.
• 💼 Consumer defense attorneys often find success in challenging National Collegiate's weak cases.
• 📁 Many of these lawsuits are filed in Superior Court and go through a compulsory arbitration process, limiting access to witnesses.
• ❓ Responding to a lawsuit from National Collegiate is crucial, as there are viable defenses.

Questions & Answers

Q: Why are National Collegiate Student Loan Trust's cases typically weak?

National Collegiate often fails to provide evidence that they own the particular account they are suing on or accurately calculate the amounts owed. They rely on paperwork and computer printouts that don't hold up in court.

Q: Who provides false or misleading affidavits in National Collegiate's lawsuits?

They use a company called Transworld Systems to testify on their behalf. However, many of the affidavits are not based on personal knowledge and are signed by individuals removed from the original creditor, causing credibility issues.

Q: What actions is the CFPB proposing against National Collegiate?

The CFPB is asking the court to approve an audit of National Collegiate's 800,000 student loans, restitution to consumers, the cessation of collection lawsuits on time-barred debts, an end to false affidavits, and financial penalties for both National Collegiate and Transworld Systems.

Q: What can consumers do if they are sued by National Collegiate?

Consumers should seek legal assistance, as there are strong defenses available. Ignoring the lawsuit is not recommended.

Summary & Key Takeaways

• The Consumer Financial Protection Bureau (CFPB) is addressing the issues with National Collegiate Student Loan Trust, a company that purchases old charged off private student loans and files lawsuits against consumers.

• National Collegiate's cases are typically weak, and consumers can often get favorable results by challenging them.

• The CFPB has proposed a judgment that includes an audit of National Collegiate's loans, restitution to affected consumers, and penalties for both National Collegiate and Transworld Systems.