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

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


– 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 issued by the Consumer Financial Protection Bureau, we call it the CFPB for short. They’re a federal agency who’s in charge of really looking out for consumers when it comes to things
like debt collectors, credit card companies,
banks, those types of things and making sure that they’re
dealing fairly with consumers. Well, just recently they
issued this press release where they talked about
action that they’re taking against National Collegiate
Student Loan Trust and who this company is, they’re a company that alleges to have
purchased old charged off private student loans and
they file lawsuits on ’em. And here in Arizona where I practice law, we see these all the time and I deal with these kind
of lawsuits all the time. And they are typically complete garbage. I always say it’s almost
a blessing in disguise to get sued by National Collegiate because their cases are typically so bad you can often get a good result, whether it be a very low settlement, or even getting the case
thrown out completely, because they have so many problems. My experience with National Collegiate is exactly what the Consumer
Financial Protection Bureau outlined in their press release. They said, they have problems
with National Collegiate because they were suing
consumers for debts that they could not prove were owed. And this is the number one thing I see. They provide a bunch of
paperwork, computer printouts, that don’t really provide any evidence that own the particular
account that they’re suing on, or providing really any evidence as to how they’re calculating the
amounts that are owed. There’s big problems
when it comes to that. They also go on to say,
that they often file false or misleading affidavits. Now an affidavit is a
sworn statement by party, where they’re attesting that information in there is correct. However, what they’re saying here, is that most of the affidavits submitted with National Collegiate lawsuits, are not based on personal knowledge or the person who’s signing off on it. And the reason why, is
because they use this company called Transworld Systems and I know this is kind of getting into
the weeds of things a bit, but they use this company
called Transworld Systems to testify on behalf
of, usually another bank on behalf of National
Collegiate Student Loan and then four other companies
along down the line. And this is what causes so many problems, is you’ve got someone
who is there to testify on behalf of their particular plaintiff, who really doesn’t have any
idea about what happened because they are so far removed from the underlying original creditor. Now, what they have done in trying to curb some of the things that
National Collegiate was doing, they have submitted a proposed judgment to the court, that they’re trying to get the court to sign off on. It’s important to know
this, as of this video, the court has not signed off on it. But what they’re asking
the court to approve, I can tell you in most
cases the court does approve these types of things, is they’re asking that National Collegiate conduct an audit of all
800,000 student loans that they have in its portfolio. That they pay 3.5 million
dollars in restitution to consumers who made payments
to National Collegiate after they filed a lawsuit against them. They have to agree to stop
filing collection lawsuits on debt that can no longer
legally be sued over. This means it’s outside
the statute of limitations. That’s something a lot of
people don’t know about private student loans, is that
the statute of limitations typically does apply, which in Arizona, that would be six years, six years from the time that essentially when payment was stopped, when payment wasn’t being made anymore. They have to stop filing
those false affidavits, they have to disgorge 7.8 million dollars to the US Treasury. They have to pay a 7.8
million dollar civil penalty and Transworld Systems, the company that does all of the affidavits
for National Collegiate, they also have to pay a 2.5
million dollar civil penalty. And Transworld’s actually
already signed off on that. So there’s just a ton of moving parts when it comes to these cases and when you look at the actual
evidence and the documents, they’re just a mess as far
as National Collegiate goes. Not only that, something
that’s interesting about these cases as it applies
particularly to Arizona, is that typically they’re
filed in the Superior Court, because they’re for more than $10,000, ’cause most student loans are quite large. Because of that, these
cases have to go through this compulsory arbitration process and they don’t ever have
witnesses appear there. And I’ve heard through the grapevine, the reason why that’s the case is because National Collegiate’s
not willing to pay to have a witness participate
in that particular process, that’s Arizona specific. So essentially they file these suits hoping that people will
just not respond to ’em. There is a high default
rate in cases like this, again if you do get sued
by National Collegiate, please give me a call, give another consumer attorney a call, because there are a lot of strong defenses and the worst thing you can
do is not respond to it. If you want to learn more
about National Collegiate or frankly any other large debt issue that you might be dealing with, and how you can deal with them, head on over to my website
at consumerwarrior.com. I have over 500 articles there
that I’ve personally written. I have about 100 videos like this, with more being added daily. I even have an audio podcast that could help provide
some of the solutions to the debt problems
that you’re dealing with. Appreciate you watching today.

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