Student Borrowers Freed From Lawsuits After New York Reaches Deal With Transworld Debt Collectors | new York

(The Center Square) – Student loan borrowers will be freed from legal action resulting from illegal collection agent practices, the New York attorney general’s office recently announced.

The protections apply to thousands of students who have not repaid their loans, A press release of the New York attorney general’s office, Letitia James, said.

Attorney General’s Office investigation found that Transworld Systems, Inc., one of the nation’s largest debt collectors, violated federal and state consumer protection laws while providing services on behalf of the National Collegiate Student Loan Trusts. Transworld’s practices included making false and misleading statements and filing lawsuits beyond the statute of limitations.

Transworld has agreed to change its debt collection practices and will pay $ 600,000 in restitution as part of the settlement agreement.

“Today my office holds Transworld accountable for the illegal and manipulative student loan collection practices that have affected thousands of New Yorkers,” said James. “For years, Transworld has used fraud and deception to pursue delinquent borrowers and obtain large-scale default judgments. Our investigation not only puts hundreds of thousands of dollars back into the pockets of student borrowers, but also made real changes through Transworld, which finally gives consumers struggling with delinquent student loans all the protections required by law. “

Among the changes that Transworld has agreed to implement:

• “Stop identifying National Collegiate Student Loan Trusts as ‘original creditors’, stop identifying documents prepared for litigation as” redacted “, end the obfuscation of entities involved in granting loans of the National Collegiate Student Loan Trusts and stop using deceptive language in communications with borrowers suggesting that they cannot sue due to the expiration of the statute of limitations “

• Strengthening the training of Transworld staff members.

• Agree not to initiate proceedings after the expiration of the limitation period

• Voluntary dismissal of all lawsuits brought between January 1, 2018 and the date of settlement.