It’s no secret that a large amount of Americans are in serious student loan debt. To be exact, there are more than 40 million Americans who owe nearly $1.4 trillion in student loans combined. This debt has become a financial toll for many with schools, the government, and borrowers alike trying to find ways to lessen the burden of student debt whether its lowering tuition, introducing legislation, or taking advantage of refinancing.
For many debt collection companies, these loans are a profitable business, and not all of them are following the strict guidelines set by the Federal Trade Commission.
One company in particular—GC Services in Houston, TX—must pay $700,000 to resolve allegations that it used illegal practices to collect money from borrowers with federal student loans and other debt according to the FTC.
There are certain practices that debt collectors are not allowed to engage in such as contacting borrowers before 8 a.m. or after 9 p.m. (unless the borrower asked them to), contacting someone at work once they’ve been told not to, using threats of violence or harm, publishing a list of names of people who refuse to pay their debts, using obscene or profane language, repeatedly using the phone to annoy someone, and more.
According to the complaint, GC Services allegedly left phone messages for borrowers and disclosed their debt to others without permission. It is also alleged that company employees called third parties in an attempt to find borrowers, and they continued to call after they were told that the debtor could not be reached.
While the company had promised to take steps to correct this behavior, the FTC said that those changes never occurred, and the illegal behavior continued.
Under the proposed settlement, GC Services will pay a $700,000 civil penalty, and it must change its practices when it comes to contacting customers.
Image Copyright Greg.