Online student loan servicer and debt collection agency resolve alleged violations related to contacting consumers and student loan debt.
Massachusetts Attorney General Maura Healey, an online loan servicer and a debt collection agency recently reached settlements in two separate matters filed in Suffolk County Superior Court.
The settlements resulted from alleged violations by the two companies of the state’s debt collection regulations and the Massachusetts Consumer Protection Act.
In the first, resolved last month, online student loan servicer Avant agreed to pay $1.6 million in the settlement alleging it did not provide consumers with the proper validation notices and made a high volume of debt collection calls to consumers, according to a news release.
After learning of the alleged violations, Avant corrected its practices, “including sending the required validation notice in its collection letters for consumers falling behind on payments, and updating its call policy to comply with state regulations,” according to the news release.
An assurance of discontinuance in the Suffolk County Superior Court requires the company to continue to comply with Massachusetts laws and regulations.
In the second settlement, also an assurance of discontinuance in Suffolk County Superior Court, Transworld Systems Inc. resolved allegations of reported high volumes of calls to consumers and collecting on time-barred debt, according to a news release.
The settlement includes a $2.25 million payment and changes to the company’s business practices.
While these actions occurred at the state level, ACA International members can take note of the issues identified in the allegations from the attorney general’s office.
Compliance resources are available on the Reg F Resource Center and through ACA How: Reg F implementation, an educational video series on the debt collection rule available for purchase. It is also included for All-Access TrainingZone subscribers.
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