Collection agencies exist across a wide range of industries.
One of the major areas for collections, however, is the student loan industry.
Currently, in the United States, $1.2 trillion is tied up in student loans.
And, unfortunately, among 20% of borrowers are in default on these loans.
Because student loans are such a serious, high-dollar
concern, the Consumer Financial Protection Bureau recently turned its attention
toward those who attempt to collect these debts and service the loans. The
organization, after conducting its investigation, was quick to identify and
highlight several illegal student loan collection practices, which has put
those who are responsible for collecting student debts on high alert.
What has made such collectors even more concerned is that,
following this announcement from the Consumer Financial Protection Bureau, the
Department of Education and the Department of Treasury also launched their own
investigation into student loan servicing in an effort to ensure that all
servicers are in compliance with the Dodd-Frank Act and that they do not
utilize unfair, abusive, or deceptive practices.
Behaviors that all of these agencies deem inappropriate
include:
·
Servicers who act as debt collectors
·
Telephone calls made at inappropriate times
·
Maximized late fees
·
Not providing full and complete information
The Consumer Financial Protection Bureau has taken its
concern over such behaviors seriously and has launched investigations into many
major student loan services, including Discover Bank, CitiGroup Inc., Great
Lakes Higher Education Corporation, Navient Corporation, and FedLoan Servicing.
Obviously, this information can be a bit alarming for those
who attempt to collect on student loans. However, as long as collectors are
aware of and in compliance with all laws, including and especially full
disclosure of required information and telephone calls at appropriate times,
they do not have much to fear.
Compliance is key in all collection industries, and this
particular industry is just front and center at the moment. The recent
attention to student loan servicers and collectors should cause collection agents in this industry to be extremely attentive and compliant, but in
reality, those are behaviors that should always be practiced in the collections
industry.
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