Can I Sue My Education Loan Company for Harassment?
The answer is usually yes. Under the Fair Debt Collection Practices Act (FDCPA), it is illegal under federal law for student loan debt collectors to harass student loan borrowers in connection with loan repayment.
Formerly administered by the Federal Trade Commission (FTC), the FDCPA is presently enforced by the Consumer Financial Protection Bureau (CFPB). Alongside the FDCPA, the Fair Credit Reporting Act (FCRA) requires collection agencies to inform credit reporting companies in the event a student disputes owing money or disputes being late on their educational loan payments.
To pursue a lender for collection harassment related to your private student loans or federal student loans, you can either file a complaint with the CFPB or you can file a private lawsuit in state or federal court. Many state attorneys general also provide online complaint forms to report offending loan lenders and student loan servicers.
How an Attorney Can Help
If you are suffering from a student loan default or you are struggling to make your student loan payments, a consumer protection attorney can give you legal advice regarding an aggressive creditor who won't leave you alone. One major benefit to hiring a lawyer is that the FDCPA requires debt collectors to immediately cease all communications with you and to talk directly to your legal representative instead.
An experienced attorney can also help you apply for financial aid or loan forgiveness on high-interest-rate debt, obtain consolidation or deferment to help you manage your public and private loans, and explore repayment plans to boost your credit report.
What if the Phone Calls Never Stop?
Under the FDCPA, debt collectors like Navient are limited in how they contact you regarding your student loans. If a collection agency won't stop calling your phone number, you need to remind them that:
- They cannot call you outside 8 a.m. to 9 p.m. in your local time. Even if they do call just to hang up, it can't be just for the sake of causing your phone to ring nonstop to the point of annoyance or abuse.
- They cannot call you during “regular" business hours if you have special work circumstances (e.g., you work the graveyard shift at a hospital and you need rest and sleep during the daytime). Also, they cannot call your place of work if your employer asks them to stop.
- They cannot communicate with you if you give them written notice that you want to be left alone, unless it's to give you notice that they're suing you, stopping collection, or pursuing you in any other way that is legally permitted. Even then, if you are represented by an attorney, they're not allowed to contact you directly and must go through your lawyer instead.
- They cannot communicate with you after you've requested proof that you owe money until they have provided you with that proof.
Additionally, under the Telephone Consumer Protection Act of 1991 (TCPA), debt collectors are not allowed to use auto-dialers or automated phone calls to harass you in relation to unpaid debt.
Other Prohibited Behavior
Unfortunately, collection agencies have a reputation for being aggressive. Sometimes they will skirt the rules by finding other ways to intimidate you even if you ask them to stop calling you. A debt collector will sometimes purposefully engage in unfair tactics to put you in the desperate position of calling them when they know they can no longer call you themselves.
As previously stated, the Fair Credit Reporting Act (FCRA) requires collection agencies to be truthful with credit reporting companies. They can't just make up lies to destroy your reputation with credit reporting agencies (Transunion, Experian, or Equifax) to lure you into calling them. The FDCPA itself prohibits collectors from reporting false information or threatening to destroy your credit by lying to the credit reporting agencies about your debt.
The bad behavior may not stop there, however. Because debt collectors have a history of pulling other tricks to get around calling you, the FDCPA stops them from:
- Sending you embarrassing media, like pesky postcards that oust or guilt you as a bad debtor
- Sending your friends and neighbors information about your debt
- Using profanity or offensive language to scare you into paying up
- Lying to you about legal action they'll take, including threatening to have you arrested or threatening wage garnishment when it doesn't apply to your situation
Needless to say, all of the above are different ways that the FDCPA tries to stop the harassment. If a collector engages in this behavior especially after being asked to stop, you'll have a pretty good case against them.
What a Debt Collector Should Do
Let's suppose that the U.S. Department of Education or a private bank helped you take out a loan for your college education. You worked hard, got your degree, and graduated into a life of low-paying jobs, or worse, job scarcity.
Then the economy tanked, inflation ate away at what little savings you had, and the little money you expected back as a tax refund ended up going toward a family emergency. Things got so tough, in fact, that you were on the verge of bankruptcy but you also heard it's almost impossible to discharge student loans in bankruptcy.
Then came the call from your student loan servicer — but, in a positive turn of events, they actually acted as a legitimate debt collector should act under the FDCPA, and they did everything right. Here's an example of what a debt collector should do:
The servicer calls you during your lunch break in the middle of the day, for the very first time. “Good afternoon, Student. My name is Loan Servicer, and I am a debt collector calling you in pursuit of the money you owe. Be advised that any information you provide to me will be used to help me collect any student debt you might owe.'
Notice that the servicer called during an appropriate time, spoke politely, identified themselves, and provided a disclosure regarding their intentions. This is all required under the FDCPA.
The Loan Servicer continues, “The name and address of your creditor are Education Bank, located at 742 Evergreen Terrace. You have a right to dispute the debt, but here's all the information we have available to verify that you do in fact owe them money and your payment is overdue."
Here, you have been provided with identifying information regarding your creditor, and you've been advised of your right to dispute the validity of the debt. Still, you respond with disappointment because no one likes debt collectors, and certainly not ones coming after you for overdue debt. You reply sharply, “Please stop communicating with me ever again, okay? Thanks! Bye."
That's it—that's where it's supposed to end if the debt collector doesn't want to get sued for harassment or abuse. At this point, the collection agency is allowed to sue you if they have validated the debt. However, they're usually only allowed to sue you in a court that is local to where you live or local to where you signed your loan agreement. On the other hand, if you were suing them, you may not be limited in the same way.
Harassment Didn't Stop? Your Lawyer Won't, Either.
If your education loan company won't stop abusing you, rest assured that with the right legal representation, you'll have an attorney that won't stop fighting for you in return.
As a bonus, an attorney can ask the court to give you up to $1,000 in statutory damages under the FDCPA. You can also recover any actual damages you suffered as a result of a collector's harassment, plus costs and attorney's fees.
Be aware that if you want to sue under the FDCPA, you have only one year from the time of the offense. So make sure that you contact a consumer protection attorney promptly to get legal advice about your claim. Some lawyers may give you a free consultation.