Consumer Finance

FTC Settles With Student Loan Debt Collector For $700K

One of the most egregious types of loan debts in the country are student loan debts. According to the Federal Trade Commission (FTC), the largest growing segment of the debt collection industry belongs to those choosing to further their education. In this population of people who owe money, the FTC says there are over 40 million people across the United States carrying a student loan debt of an average $29,000.

While paying down a debt can be difficult post-graduation due to either trying to find a job or saving up to buy a first home, many students find themselves on the receiving end of debt collector calls. Third-party debt collector GC Services is one of these companies making calls to students around the country.

Following several illegal voicemails that revealed debt amounts and continued calls to people confirmed to be the incorrect debtor, GC Services did not follow up on punishing employees. As a result, GC Services was in direct violation of the Fair Debt Collection Practices Act. Upon hearing this, the Department of Justice filed an official complaint on behalf of the FTC. In a 3-0 vote, the FTC referred the civil penalty complaint to the Department of Justice.

Following a long and arduous lawsuit with the FTC, GC Services was ordered to pay $700,000 in damages.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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