I-Team: Man says collection agency is wrong
A Pawtucket man says he’s being hounded by a collection agency for an unpaid student loan.
But the former student told the NBC 10 I-Team he doesn’t owe a thing.
Zach Hatch spent two years at Bryant University, where he took out a number of student loans.
More than a year ago, Hatch said he consolidated the loans and began making the payments, but then he got a big surprise last year.
His income tax refund was taken by a collection company called NCO Financial Systems Inc. A letter from the agency said he had defaulted on his consolidated student loans.
“After I got the letter and didn’t get my stimulus check back either, I called the company and tried to figure out what was going on,“ Hatch said.
NCO Financial insists Hatch defaulted on the loan and that with interest, he owes the company nearly $16,000.
“They said I had a loan that got defaulted in 2005 that I had taken out. They said I need to start paying them $165 a month or they were going to start garnishing my wages up to 50 percent a week from my paycheck,“ Hatch said.
But Hatch said there was one problem with that: He did not default on the loan.
The I-Team called NCO Financial, but a woman refused to comment.
A spokesman for the attorney general said the office has had a few complaints about NCO Financial but that they have had some success in negotiating settlements.
The office offered to help Hatch figure out what is going on.
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Reader Reactions
To Mega,
Yes, the debt of the original creditor goes on the credit report, but if a 3rd party collections agency reports that you owe it, you have the right to leave a comment about it with the Credit reporting agency (CRA). They have to post the comment. Something like “The report by such and such 3rd party collections agency is a fraud, I owe nothing to this company”. You can also put the CRA on notice to remove the claim or provide proof of validation. You should also send notice and demand to the 3rd party collections agency and get a good lawyer because the next step is suing for damages caused by the false claim of the Collections agency.
As the economy worsens, a lot of good people are being exposed to the down right hostel and slanderous operating procedures of 3rd party collections agencies. They have rules to live by but many do not.
We have rules and laws to protect us. Learn them, learn how to use them properly, and stand up for your rights.
Tell those 3rd party parasites in a lawful way, where to go.
I know someone who had the same problem and everytime it seems to be fixed with lots of leg work with faxing information, phone calls, etc. then two months later the same thing. All of this went on his credit report and can never be removed. I highly recommend hiring a lawyer quickly and in the mean time keep good records of every conversation and all paper work. This has been about 8 years on going with a friend of mine. Fix it now!!!! Good luck to you!!!
www.studentloanjubilee.blogspot.com
This is pretty typical behavior of Private Student Lenders. After they lobbied congress in 2005, the law was changed to make student loan debt never forgivable.
It gives companies like this one great incentive to make mistakes which generate huge returns.
Three people cannot be wrong! I too had issues with this agency with wrong information and extremely rude people working for that company. They hung up on me when I asked for information supporting their call. Almost like I owed this woman personally. They had same name but a wrong address! They didnt want to hear it. Unfortunately they scared me enough to pay what they said I owed even though I told them I did not owe anything and it wasnt my bill. The threats are awful. I wish a story like this came to light sooner. The consumer doesnt get any help in these situations. I called the company that supposedly reported this outstanding debt and they wouldnt give me anything either, said I had to get if from NCO except NCO said I had to get it from the company. You can’t win. Even after I made the payment I couldnt get a receipt! That company is awful.
Macwildstar is right, you need to see an attorney and fast if they have started taking funds from you. I had less severe problems with NCO a few years ago. They called at all hours of the day and night - yes, illegal - about a PayPal account I had defaulted on for an ebay purchase when I lived in Newport. Several problems - no PayPal account, never lived in Newport nor have I ever purchased anything on ebay. The calls were extremely nasty and financially threatening. I finally took their information down and instead of sending the rather large check they demanded, they received a letter from my attorney. I have never heard from them again. See an attorney or they will never go away.
NCO Financial is one of the worst of the parasites out there for student loan industry. They contacted me once, and I demanded to see proof of contract, naming NCO financial as a party. They failed to provide such a contract. Instead they sent me 150 pages of mostly unreadable garbage. Can you say mail fraud?
Needless to say after some time, they decided it would be better to leave me alone, because I was ready to file suit against them for a number of legal violations.
As for Mr. Hatch, he needs to file suit against them as soon as possible, with a good lawyer.
He stands as a shining example of the Powers the US Congress has given the student loan industry, powers that make mobsters envious. Direct violation of our 7th amendment protections, not to mention the 4th, 5th and 6th as well.
This is the result of the US Congress removing all consumer protections from student loans, over a 12 year period of time starting in 1991. First bankruptcy was slowly eroded (from no wait, to 3 year wait, to 7 year wait to not being able to file at all), then Statute of limitations was removed, along with truth in lending and other consumer protections.
The result is 3rd party collections agencies (parasites in my opinion) have a field day with these kinds of loans. The system is actually designed to make more money off a defaulted loan. This is not right.
Student loans are (now) the only form of consumer debt lacking standard consumer protections. In 1997, student loan companies such as Sallie Mae successfully lobbied Congress to amend the Higher Education Act (HEA) and remove consumer protections, making defaulted student loans among the most lucrative and easy debts to collect. The loan companies actually have a vested interest in debtors defaulting on their loans, and great leeway to collect on those loans.
There is absolutely NO legitimate public interest served by creating a caste of permanent indentured servants (slaves) who can never get out of debt, never invest in our communities, never have the kind of life this country has promised to those who do all the ‘right things.‘
Although it seems as if it crept up on us, student-loan indebtedness is not an accident but a policy. It is a bad policy, corrupting the goals of higher education. The world we inhabit is a good one if you are in the fortunate third without debt, but not nearly so good if you live under its weight. Student debt produces inequality and overtaxes our talent for short-term, private gain. As a policy, we can and should change it.
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