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Taking on FedLoan Servicing with FCRA 623(a)(2) dispute

Valued Member

Re: Taking on FedLoan Servicing with FCRA 623(a)(2) dispute

I am with 1000%. I weighting this option heavily myself since I have been locked out at every turns. Cause really if you think about it you just wasted a forbearance.

Message 11 of 29
New Visitor

Re: Taking on FedLoan Servicing with FCRA 623(a)(2) dispute

Hi all,

 

New to this board but I wanted to throw in my 2 cents. I'm on the same boat, missed payments, was approved for a retroactive forbearance, now showing a bunch of lates on my credit report. I contacted FedLoan about this but they refused any assistance, repeatedly. I then submitted a dispute to all 3 CBs along with the Section 623 wording and copies of the forbearance approval letter. They came back and said nothing was to be updated since it was all verified. After a few calls to them I figured it was going nowhere so I went and filed a complaint at https://help.consumerfinance.gov/app/studentloan/ask.

 

Then I received the following email:

 

We’ve sent your complaint to the company for a response.
 
We will let you know when the company responds. The response should include the steps they took, or will take, in response to your complaint.
 
You should receive a status update within the next 15 days.

 

The statement I submitted to them was:

 

Section 623(a)(2) of the FCRA addresses the duty to correct and update information by "furnishers," or persons who furnish information to consumer reporting agencies ("CRA") such as credit bureaus. It specifically states that this duty extends to all student loan accounts reported to CRAs, regardless of whether they were accurate at one point, because the section requires the furnisher both to "update" accounts as well as to "correct" those that were erroneous when submitted to the CRA. In my case payments were missed and delinquencies were first reported, however, retroactive forbearances were approved which covered the time frame in which the delinquencies took place. As per the FCRA section mentioned above the furnisher has a duty to correct/update this with all credit reporting agencies, regardless of whether they were accurate at one point. I have requested the furnisher to correct and update the information to no avail. I then filed a dispute with Experian, Transunion, and Equifax. I provided them original approval letters from the furnisher of the forbearances in question which included the time frames which they covered. They stated that they sent the information to the furnisher but they did not provide updates regarding the payment history disputed, alleging no errors were present.

 

We will wait and see...

Message 12 of 29
Valued Member

Re: Taking on FedLoan Servicing with FCRA 623(a)(2) dispute

Any update on this? Did consumer finance help?
Message 13 of 29
New Visitor

Re: Taking on FedLoan Servicing with FCRA 623(a)(2) dispute

The CFPB complaint is still going. I just got a message that said they (FedLoan) were looking into it.

The CRA disputes were resubmitted but this time I called FedLoan and asked for a detailed history of any and all deferment/forebearance records on my account along with account balance and status. I received a letter that had my accounts along with the 'sequence' that identifies them. It had a statement that my account was current and below that included a break down of the types of deferments approved and the dates. I sent that to all CRAs and Transunion used that document to delete all the late payments. Experian called FedLoan on 3way with me and confirmed the info on the letter. I tired very hard to keep it focused on that and not touch on the late payments. I did make sure to ask if payments were required during deferments and FedLoan said no so Experian deleted all late payments too.

Equifax... Ugh. They refuse to contact FedLoan and said they just send the paper and let them 'do their thing' which is only half of what the FTC states they should do since THEY also need to investigate. I filed a BBB complaint against them and am waiting on that.

2 down 1 to go!!!!
Message 14 of 29
Regular Contributor

Re: Taking on FedLoan Servicing with FCRA 623(a)(2) dispute

FedLoan Servicing responded to my CFPB complaint today. Here's the text of their response:

 

"As explained more fully in the letter/packet of materials uploaded to the CFPB portal in response to the individual's inquiry

  • FedLoan Servicing is servicing the loans in accordance with federal guidelines and the terms of the signed promissory notes executed by the borrower.
  • FedLoan Servicing advised the borrower that the underlying loans included in the consolidation process were reported unfavorably in 2013 when no payments were received and when no forbearance was requested on the account in a timely manner.
  • FedLoan Servicing further advised the borrower that a period of forbearance resolved the delinquencies on the account in January 2014, but it did not remove previous unfavorable credit information that had been submitted accurately in accordance with the Fair Credit Reporting Act (FCRA).
  • FedLoan Servicing provided the borrower with a special credit reference letter.
  • FedLoan Servicing provided contact information for the U.S. Department of Education's Ombudsman's office for further questions.
  • FedLoan Servicing provided the current status of the Consolidation Loan, which had no unfavorable credit reporting.
  • FedLoan Servicing provided contact information.

No further actions are planned by FedLoan Servicing at this time."

 

Unfortunately, I can't access the PDF attached to the case on the CFPB site, so I can't see their full rationale.

 

No matter what else they might say, they completely disregarded the FTC advisory opinion. Hey, I guess if you don't agree with something, completely ignore it, right? My next step is to get a lawyer, unless there's a case for pursuing this with the FTC first. I'm not gonna just roll over for FLS! 

Starting scores as of 8/14: Low/mid 500s
myFICO 08 scores as of 12/17/17: EX: 741, TU: 739; EQ: 714 | Mortgage scores as of 12/17/17: EX02: 695, TU04: 687, EQ05: 683
Original Goal: FICO 8 700 across the board and mortgage scores above 680 by 11/1/17...Done!!
New Goal: FICO 8 750 across the board and mortgage scores above 700 by 7/1/18
Currently ~$100k in available credit
Message 15 of 29
Member

Re: Taking on FedLoan Servicing with FCRA 623(a)(2) dispute

I'm in EXACTLY the same boat FLS as you are from 2013. I had 14 trade lines that were in deferment and then retroactive foreberance while awaiting consolidation and they all went 90 days late.  I've been fighting with them since. I'd love to join in on a class action with you, had I let these loans go into default and then rehabbed them, the lates would have been removed, instead I have 14 closed loans each reporting 90 days late at some point in 2013. So angry!!

Message 16 of 29
Member

Re: Taking on FedLoan Servicing with FCRA 623(a)(2) dispute

I'm in the same boat as all of you with quite a few lates (30, 60, 90, 120 day lates) showing on my reports from each of my three loans over a six year period. Each time I was granted retroactive forebearance and tried disputing the lates but Fedloan kept saying the information was accurate. Super frustrating. They were nightmares to work with. I did an IBR with them middle of 2015 where I got my payments to go down to $0 a month after finishing my last forebearance. Never once did they let me know that there was a month lapse between when my forebearance ended and my IBR started where I owed some like $115. I thought everything was fine until I got a letter from them stating that I had defaulted and they were sending them to collections. It was honestly a sigh of relief for me. The collections agency I'm working with is a dream compared to Fedloan.

I'm hoping that once I'm done rehabbing, they'll all be removed off of my report but will definitely try this if all else fails.
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Message 17 of 29
Regular Contributor

Re: Taking on FedLoan Servicing with FCRA 623(a)(2) dispute

I've got Hyatt Legal Plans coverage through work, so I contacted a local attorney today to see if I could set up a consultation to go over this issue and see if there is any feasible recourse through the legal system.

 

The consultation is scheduled for 9/2, so I'll keep y'all updated!

Starting scores as of 8/14: Low/mid 500s
myFICO 08 scores as of 12/17/17: EX: 741, TU: 739; EQ: 714 | Mortgage scores as of 12/17/17: EX02: 695, TU04: 687, EQ05: 683
Original Goal: FICO 8 700 across the board and mortgage scores above 680 by 11/1/17...Done!!
New Goal: FICO 8 750 across the board and mortgage scores above 700 by 7/1/18
Currently ~$100k in available credit
Message 18 of 29
Regular Contributor

Re: Taking on FedLoan Servicing with FCRA 623(a)(2) dispute

Talked to the lawyer this morning, he thinks there's definitely grounds for a suit and would be willing to take it on on a contingent basis. Before filing suit, though, he recommended sending FLS one more strongly worded letter querying why they are disregarding their duty to update their reporting per the FTC advisory opinion and let them know that if they don't update the reporting accordingly, they will be sued for damages.

 

Off the top of my head, the financial damages he said I could sue for are the increased security deposit my landlord charged me due to my credit score, the difference in interest rates between what I bought my car at last year and what I just refinanced at a few weeks ago, and there was also a job offer that was rescinded a few years ago due to the credit check, but unfortunately I don't think I still have any of that documentation.

 

I didn't ask him about punitive damages or anything of the sort, but my next step is to dispute FLS' response to the CFPB complaint and go from there.

 

Glad the lawyer said there's a case!

Starting scores as of 8/14: Low/mid 500s
myFICO 08 scores as of 12/17/17: EX: 741, TU: 739; EQ: 714 | Mortgage scores as of 12/17/17: EX02: 695, TU04: 687, EQ05: 683
Original Goal: FICO 8 700 across the board and mortgage scores above 680 by 11/1/17...Done!!
New Goal: FICO 8 750 across the board and mortgage scores above 700 by 7/1/18
Currently ~$100k in available credit
Message 19 of 29
Community Leader
Super Contributor

Re: Taking on FedLoan Servicing with FCRA 623(a)(2) dispute


habu987 wrote:

Talked to the lawyer this morning, he thinks there's definitely grounds for a suit and would be willing to take it on on a contingent basis. Before filing suit, though, he recommended sending FLS one more strongly worded letter querying why they are disregarding their duty to update their reporting per the FTC advisory opinion and let them know that if they don't update the reporting accordingly, they will be sued for damages.

 

Off the top of my head, the financial damages he said I could sue for are the increased security deposit my landlord charged me due to my credit score, the difference in interest rates between what I bought my car at last year and what I just refinanced at a few weeks ago, and there was also a job offer that was rescinded a few years ago due to the credit check, but unfortunately I don't think I still have any of that documentation.

 

I didn't ask him about punitive damages or anything of the sort, but my next step is to dispute FLS' response to the CFPB complaint and go from there.

 

Glad the lawyer said there's a case!


Good on ya! FLS is ridiculous in their idiotic stance that "retroactive" forebearance does not apply to the reporting of derogs - well, what would even be the point of the "retroactive" part, if its not to address reporting of derogs? That the whole frickin point of it being retroactive! Idiots.

Most Recent FICO 8 Scores EX616/TU587/EQ607 01/09/2018 Starting scores 553/485/543 08/25//2017
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Message 20 of 29