CFPB Settles With Student Loans Manager Over Alleged Prior Consent Order Violations | Weiner Brodsky Kider PC
The CFPB recently concluded a consent order with a student loan manager, alleging violations of a 2015 prior consent order, as well as other unfair acts and practices. The student loans manager, who neither admitted nor denied the allegations, is required to pay $ 10 million in consumer redress and a civil fine of $ 25 million.
The 2015 consent order was based on the alleged inaccuracy of the minimum amounts owed by the student loan manager on billing statements and tax information consumers needed to receive federal tax benefits, as well as the practices of recovery of allegedly illegal claims of the manager. The CFPB alleged that the managing agent violated the 2015 consent order by distorting consumers’ minimum loan payments, the amount of interest paid and other information, including interest rates, payments , due dates and availability of rewards. The CFPB also alleged that the managing agent failed to pay the full consumer remedy required by the 2015 consent order. In addition, the CFPB alleged that the manager engaged in acts and deceptive practices by withdrawing payments from consumer accounts without valid authorization and by canceling or not withdrawing payments without notifying consumers.
The CFPB made its findings after a manager’s review in 2017, as the manager migrated its student loan management platform to a new system. The CFPB alleged that the service agent knew that problems had arisen during the migration, but did not report them to the CFPB. The CFPB further alleged that while performing the on-site review, the duty officer was also aware of non-migration issues that the duty officer did not report.