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Why student loan companies are pushing to maintain robocalls


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When the phone rang, James Hunter’s legs burned in pain.

He has been paralyzed from the waist down since an accident when he was 30, and Navient’s incessant calls about his student loans have triggered his nerves.

“Every time my phone rang, I had an anxiety attack,” said Hunter, 44.

His $ 60,000 in federal student loans were canceled due to his severe disability, but Navient, one of the nation’s largest student loan managers, continues to collect his $ 40,000 in private loans. He sent the company notes from his doctor and explained to them that he was in a wheelchair and unable to use his film degree, but to no avail. The calls continued.

“They put my back to the wall with no remedy,” Hunter said. “I felt hopeless.”

Now he is suing the company for harassment damages.

Navient called Hunter nearly 2,000 times, according to his attorney Billy Peerce Howard, of The Consumer Protection Firm in Tampa, Florida. Peerce Howard is currently working on a dozen other cases, in addition to Hunter’s, against Navient over his automated calling practices.

Nikki A. Lavoie, director of corporate communications at Navient, said many borrowers need one-on-one support to fully understand their options.

“Direct communication is essential to process, resolve and avoid delinquent and delinquent loans,” Lavoie said.

Many automated calls are about debt

While much of the conversation around robocalls centers around scams, many of these calls are actually from companies collecting debt. In fact, 9 of the top 10 robocallers in June were calling about people’s backlogs, according to YouMail, a robocall blocking service.

Automated calls use an automatic phone dialing system, and when you go off-hook, it could be a live person or a pre-recorded message. Calls usually come from different and sometimes familiar phone numbers, so you’re more likely to take them.

As student debt in the country skyrockets, former students are increasingly the target of these appeals.

The stock of student debt in the United States now exceeds $ 1.5 trillion, surpassing auto and credit card debt and only behind real estate debt. According to Mark Kantrowitz, editor of SavingForCollege.com, about 1 in 5 student loan borrowers in the major federal direct lending program are currently in arrears.

Additionally, consumer advocates fear these calls will increase if the Federal Communications Commission does not impose stricter regulations on these companies, something they fear will not happen under the Trump administration.

“We are at war with the FCC,” said Margot Saunders, a lawyer at the National Consumer Law Center. “On the one hand, there are the consumers and the people who are called and harassed, and on the other, the callers, including Navient and other student loan services.”

Student loan collectors fight to keep calling

In May, the Federal Communications Commission asked for comment on how the Consumer Telephone Protection Act, which Congress passed in 1991 to prohibit businesses from calling a person’s cell phone without their permission, should be interpreted with regard to automatic dialers.

Consumer advocates fear the administration will side with businesses that want to continue calling consumers with fewer restrictions. (In response to questions from a reporter, an FCC spokesperson highlighted his initial public request for comment.)

Saunders pointed out that the commission had previously postponed an Obama-era rule that imposed regulations on debt collectors using automatic dialers to contact people about federal debts, including the fact that they cannot call debt collectors. people more than three times a month.

In a recent letter to the Federal Communications Commission, a group of three major student loan managers, including the Student Loan Servicing Alliance, a business group, argued that these rules were “arbitrary, capricious, or an abuse of discretion.” and that they “will prevent the parties from helping borrowers and collecting federal debts.”

“They say, ‘We can call you 100 times a day until you die and there’s nothing you can do about it,'” said Peerce Howard of The Consumer Protection Firm.

Errors and other issues with automatic dialers

Last year, a handful of consumer groups wrote to the FCC, asking it to penalize Navient for hacking student loan debtors “repeatedly and abusively.”

In the complaint, the groups cite dozens of lawsuits against the company for its appeal practices. A number of cases have been brought by people who have said they are getting calls for a debt that is not even theirs.

This is what happened to the Stein family.

Shortly after Leah Stein graduated from law school, she began receiving urgent calls from Navient indicating that she was behind on her debt. She had her own student loans, but never missed a payment.

“It made me nervous,” said Stein, 30. “I was hoping I was paying the right thing.”

But it turned out that Navient was looking for a Laurie Stein, not her, Leah Stein.

They say, “We can call you 100 times a day until you die and there is nothing you can do about it.”

William Peerce Howard

lawyer at the Consumer Protection Cabinet

But even after I explained that they were calling the wrong person, the calls continued. Navient also repeatedly called his father, mother and brother about these overdue loans that were not his.

Navient said he was not commenting on the pending litigation.

The family is now suing Navient for its “random and uncontrolled use of its automatic numbering system”.

Because automatic numbering systems are so inexpensive to use – in a lawsuit it is estimated to cost around 1 cent per minute – companies have no incentive to correct false information, said Peerce Howard of The Consumer Protection Firm.

“They know they can harass people and the vast majority of them won’t be able to find a lawyer who can fight for them,” he said.

Saunders of the National Consumer Law Center said this approach to debt collection is dangerous and a more responsible method is needed.

“People are not paying their student loan debt because they are disabled, because they have lost their jobs or because something bad has happened,” she said. “Not because they have tons of money and see if they can get away with it.”

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