May 15, 2007

Branch of Sallie Mae accused of abusive tactics

Posted in Student Loan News at 3:13 PM by Joe From Boston


The Boston Globe carried a very interesting article yesterday.  One branch of the company – a collections department- is being accused of bullying and heavy-handed tactics, even against people who were put in that situation incorrectly!

Sallie Mae called out once again

Officials claim lender’s collection unit uses heavy-handed tactics

Jan Craig dreaded picking up her phone.

A computer mix-up mistakenly showed she owed a $1,040 credit card debt, and for nine months a collections company allegedly harassed the Florida homemaker with automated voice messages or rude telephone representatives who demanded she pay up. One threatened to call her at all hours of the night.

“It was such a shock to get these phone calls,” says Craig. “It puts this pall over your life.”

The calls, it turned out, came from a division of SLM Corp. — better known as Sallie Mae, the student lending giant now under scrutiny over its dealings with college administrators and how it markets loans.

But documents also show Sallie Mae faces questions over what critics say are its heavy-handed tactics to collect debts for student loans and for broader consumer lending.

Sallie Mae says some of the complaints are old, that it has put new policies in place to prevent abuses, and that their numbers aren’t significant compared with the millions of transactions it conducts smoothly. The aggressive collection comes from a little-known unit that generated $157 million in profit on $636 million in revenue in 2006, one reason a group of private-equity investors and banks agreed to purchase Sallie Mae for $25 billion last month.

However, the collections work has also made Sallie Mae the target of several inquiries from officials concerned its practices amount to bullying. In a letter to Sallie Mae’s chief executive on April 26, for instance, Senator Edward M. Kennedy, Democrat of Massachusetts, wrote that he was concerned the company and other lenders “may be engaging in harsh and inappropriate tactics” against borrowers.

Kennedy spokeswoman Melissa Wagoner said the note was prompted by complaints from current and former students that collections agents used profane language, at tempted to collect debts that didn’t exist, or harassed neighbors or co-workers.

Sallie Mae’s practices have also drawn the attention of Illinois Attorney General Lisa Madigan, who filed a suit in January against Arrow Financial Services LLC of Illinois — which is part of SLM’s debt management operations unit.

In the suit, filed in Cook County Circuit Court, Madigan claims Arrow “engages in a variety of abusive practices in its contacts with consumers,” citing 669 complaints filed with her office. In Massachusetts, a spokeswoman for Attorney General Martha Coakley said her office has received 32 complaints about Arrow.

Deborah Hagan, chief of Madigan’s division of consumer protection, said her office is in settlement talks with Arrow and Sallie Mae.

Sallie Mae spokesman Tom Joyce said the talks have been “productive” and said the total number of complaints represents just a small part of the 23 million accounts the company oversees. Speaking of Arrow, Joyce said, “We hold our employees there and across SLM to a high standard of compliance. We are confident of the scope and depth of our programs.”…

Click here to read the entire article online.

Advertisements

13 Comments »

  1. Generally I do not learn post on blogs, however I
    wish to say that this write-up very forced me to check out and do so!
    Your writing style has been amazed me. Thanks, very nice post.

  2. graduate said,

    Was told that I was eligible for a payment plan of 14 months, interest only, effective immediately. I subsequently have been making interest only payments.

    Yesterday I received a letter in the mail saying I was overdue. Turns out that I wasn’t eligible for the interest only payments. Supposedly Sallie Mae sent me a letter notifying me of the error, but I never received that letter.

    When I called today to see what was going on, I was told that they have “retrained” the employees involved and that’s all they can do. Now I’m out significant $$ due to their error with no agreeable solution.

    Stay away from borrowing from Sallie Mae!! “Smart Option Student Loan”… more like Worst Option Student Loan.

  3. kelly said,

    Im so upset with salliemae as well. I just finished college in march 2010, and had no clue how much my loans were going to cost. Well, I was away visting family, only to find out that they sent an email on April 28th saying my loans were due May 1st which is only two days in advance!!! It takes two “business” days for them to process the loan!! So, I paid online April 30th when I first saw this, and now theyre charging me with late fees! Isn’t anyone fair in this world today? They’re such scammers……

  4. Pedro said,

    I had an student loan with sallie mae for only $1200, I was out of work and I applied for a forbearance over the phone that was approved, did not hear anything from them, until they sent me a letter stating that the loan was going to be tranfer to the Illinois Student Assitance Commition. Sallie Mae defaulted my student, never sent me any notice that the loan was defaulted and they filed a claim with the Guanty Agency to collect the money. they have ruin my credit since they are reporting that I was late 21 X 120days. Not only that but ISAC reported the same information and the loan is already paid off. I don’t know what to do so solve this problem since Sallie Mae was wrong.

  5. Andrew said,

    This happened to me also and has made my life hell. They have taken my tax returns and sent my info all over the United States and my one load now has doubled. buggy425@yahoo.com if there is any help for me. What happened to life, liberty, and the pursuit of happiness? Sallie Mae has ruined my life so far.

  6. even this is old thread, many usefull resources from here, thanks

  7. There is a student loan documentary (called default) coming out that mentions that student loan people do not have to follow fair debt and collection practices. I think I have seen that information elsewhere also.

  8. Alice said,

    I also have had nightmare issues with Sallie Mae. They are sending bills dated by them for one or two days before they are due. For example, I received a bill on July 3rd. It was dated by Sally Mae June 28 and it was due July 1st. This has happened two months in a row. When, I contacted Sallie Mae, they said this was because I didn’t make a payment in May. They sent me an invoice on May 17th, but it wasn’t due until July 15th. It was supposed to say June 15th, but of course Sallie Mae would not own up to their mistake. Every time I speak with a representative, including supervisors, they all say the same thing as if they were reading from a script. I am considering paying off the entire amount through a bank loan, just so I will not have to deal with them again. I am only supposed to make one payment on the 1st, via payment coupon, but I am being billed for another payment for a lesser amount on the 15th. I feel as if Sallie Mae is getting away will wrongful practices and no one can do anything about it. What can be done? I am teacher and have no extra money to hire an attorney.

  9. Alexandri deJesus said,

    I was a very happy house wife, supported by a great spouse until he suffered kidney failure. Our children were all home at the time and I wondered what how I would provide for them and a very sick sopuse.
    i found meager employment and matriculated at a local college who’s academic counselors promised that within one year I would have a bachelor’s degree in human resources. I sacrificed myself completing
    21 credits at a time in order to graduate. I was mis-advised. I was told that a “Real” degree would require that I complete an addtional 60 credits and that I would need to find a stronger major.
    I graduated with 137 college credits in psychology and secondary education Dean’s list ( all useless). I could not find employment! I called the advisor back-You need a master’s in order to find employment. I worked my meager job raised four children while taking a now recently transplanted spouse who sustained three strokes and blindless. I commuted every day one hour and a half one way and graduated sixteen months later with a master’s in counseling. I could not find employment.
    I called the academic advisors and they now stated that I would have to get into a doctoral program, I did that of course having attained scholar status
    when we had no other choice but to claim bankruptcy in my dissertation year. I had to withdraw.
    Immediately having called the student loan advisors of my status, the phone calls came in. From six am until 1 am the calls have come-in.
    I cannot express to you all, how they have embarrssed me for they have called our neighbors, our family, my old employers, One woman who named herself Mrs. Brown told our youngest son that ” Had your momma not gotton off the Fing boat and stole the governemtns money this wouldn’t have Fing happened.
    The letters are accusitory. They state ” Your neglect and nonresponsive attiudes have prompted us to take aggressive measures.” Then the calls every fifteen minutes from unidentifiable phone numbers and the cruel messages left behind.
    I cannot tell you all how close I have been to gaining a teaching interview when these agencies call the companies to let them know that I owe money.
    How do they know where I apply?
    Most recently over the past week, they called so often that my spouse’s blood pressure was raised so very high that he became unresponsive and i had to call 911 for help. He was hospitalized for four days with renal failure from the high blood pressure.
    Now, tell me anyone, who cares? I wrote the president, no response!, I wrote my state senator, he wrote back but was in trouble himself and could not help me. I wrote the FTC and they have tried to no avail.
    So, here I sit writing my story with such pain and sorrow. I tried to get myself educated to provide for a wonderful spouse and our children and I have failed.
    Full of sorrow.
    Alex dejesus

  10. Hi Jill,

    Unfortunately, once you drop below half-time or leave school, your loans automatically go into repayment. This is documented in the Master Promissory Note you signed (most people don’t bother to read it – but they should!)

    You need to call Sallie Mae NOW – not the creditors. Your loans are in default. You need to get them out of default ASAP and talk to Sallie Mae about an economic hardship deferment or forbearance – you might be able to get a reduced payment for a few months to help you get back you your feet.

  11. July 25, 2007

    I am, at this time, a single mother of one. This is due to a personal matter that came up in December, which incidentally caused me to withdraw from the college I was attending and recieving student loans from Sallie Mae to pay for. Long story shorter, I have just been notified by the representatives of Sallie Mae’s collection dept. that my loans are in default and although I did not attend the classes, I still owe this money NOW! My experience so far with Sallie Mae has been extremely distressing. They have called ten times in two days and although I thought we had made arrangements on day one, the calls keep coming and the representatives are, in my opinion, rather abusive. I contacted a supervisor, in hopes of solidifying my payment arrangements and thwarting the harrassing calls, but this man was as abusive and rude as the collectors who work under him. The calls keep coming and they appear to be getting ruder and more aggressive. I’m not sure what to do at this point and unfortunately am going to have to avoid their calls altogether and this is not my preference regarding paying debts owed.

  12. Janice,

    I know where you’re coming from, but to a smaller degree. My cell phone provider pulled a similar stunt. I’m no legal expert and I can’t offer you advice, but if I were in your position I would definitely contact my state’s Attorney General, especially if the AG is already looking into this.

    I wish you the best of luck! What happened to you is exactly why they’re being investigated. I hope they lose.

  13. Janice Vieira said,

    I am a parent who’s daughter graduated from a 4 year college in 2006. I started getting calls from Sallie Mae in August of 2006 stating that my loan was past due. I never received an invoice from them. I was informed by Sallie Mae that it was sent via email. I NEVER agreed to be billed via email. I knew nothing about this, neither did my daughter. Sallie Mae refused to tell me the email address they were supposidly was sending emails to. They were verbally abusive and uncooperative. I asked them to send me a written invoice which I received August 15, 2006. By that time I was (according to Sallie May) 2 moths behind. Sallie Mae reps told me even though I did not receive an invoice I was still liable. I read the contract to them and no where on the document is an amount stated and a beginning payment date. To make a long story short I paid off the loan in full October of 2006. However, my credit is ruined by Sallie Mae. They reported that I was delinquent. I wrote them a letter asking that they waive the late payment since I was never informed of payments due. Sallie Mae wrote back and said they reported correctly. I told them they are worst than the MAFIA. Their tactics are devasting and corruptive to any decent human being. I feel very, very violated by these people. How could they continue to get away with this blatant behavior. They are taking advantage of decent hard working americans. How could the government allow this to happen with the many many written complaints and many, many others who are saying nothing for one reason or another. Please let me know. Thank you.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: