topic Re: FedLoan reporting lates when my account was in a forbearance.. refusing to update in Student Loans

FedLoan reporting lates when my account was in a forbearance.. refusing to update

trnj88 — Sun, 03 Apr 2016 18:53:15 GMT

I have a student loan with FedLoan that I made some late payments on last summer due to helping my family with financial issues. I was reported to the credit bureaus for the following periods:

July 2015: 30 days late
August 2015: 60 days late
September 2015: 90 days late

I stupidly did not contact FedLoan during this time and instead let the account go delinquent for 90 days. My fault, purely stupid of me.. However, I called them in October and was granted a retroactive forbearance to cover the past due period. The forbearance was applied on my account for June through the end of September, covering all late periods. I was told this would reflect on my account that no payment was due during this time (as forbearance should).

Fast forward to January of this year-- the lates are still on my credit report. I contacted FedLoan and they sent me a summary in writing of all months during which my account was in forbearance. The FedLoan letterhead stated:

...
"This account was on a General Forbearance for the period 06/2015 - 09/2015"
... with some other basic account info.

I disputed these lates with the credit bureaus using this letterhead from FedLoan, but all three bureaus refused to update anything. They claimed the creditor verified all payments are reporting correctly and thus no change would be made. I disputed again, sending the dispute CMRRR and included:

- A copy of my FedLoan tradeline from that particular bureau
- The letterhead from FedLoan claiming my account was in forbearance
- My first dispute information

- Changes that need to be made

However, this week I received a confirmation that two of the three disputes had been resolved. The resolution:

"This creditor has verified to OUR company that the prior paying history is being reported correctly. This creditor has verified to OUR company that the current status is being reported correctly."

... so in other words, no change was made-- again.

Do I have any recourse other than to sue? I sent an explicit letterhead claming my account was in a general forbearance for the full duration of my reported lates, however FedLoan still fails to acknowledge this when contacted by the CRAs or when asked to update my credit report to show the accurate information.

I know I will get a lot of flack here from people saying, "...but you were late! It was reported correctly at the time!" YES, I know. But any information that is changed or updated should be reflected in my credit report. Also, I have heard many success stories of retroactive forbearances clearing lates.

I've heard the FCRA does not apply to federal loans.. is this true? Regardless, the current reporting is NOT a reflection of the accurate status of my account.

Next step is to sue if I fail to successfully dispute a third time.

Any advice is appreciated! Thanks!

Re: FedLoan reporting lates when my account was in a forbearance.. refusing to update

txbusted — Sat, 16 Apr 2016 14:58:52 GMT

**Following**

I am trying to get Aspire to update my late payment from last year. They granted a forberance but I was still dinged on my report. Not sure what they point of the forberance was if I am still going to get dinged for it.

Re: FedLoan reporting lates when my account was in a forbearance.. refusing to update

SCF — Tue, 19 Apr 2016 02:27:29 GMT

@txbusted wrote:
**Following**
I am trying to get Aspire to update my late payment from last year. They granted a forberance but I was still dinged on my report. Not sure what they point of the forberance was if I am still going to get dinged for it.

The forbearance brings your loan back to a current status and stops further payments from being due, it might also caused any late fees to be waived. Even without removing the late payment from your report, it's a good thing to have the loan back in a current status rather than past due.

Re: FedLoan reporting lates when my account was in a forbearance.. refusing to update

readytoclimb — Thu, 21 Apr 2016 03:22:28 GMT

i'm actually in the same boat. i disputed with all 3 CRA and so far EQ has been the only one to respond. They responded after i submitted an online dispute and attached the form from kheslc showing that the loan was in forbearance during said period. Their response was "We have removed the account history for this account". Not really sure what that does for my credit, if anything. I really would prefer that they just update it, but like you, not sure if that's possible since i was technically late prior to being afforded the forbearance. Going forward I will no longer be late!! Especially since I don't really have much else on my CR outisde of student loans.

Re: FedLoan reporting lates when my account was in a forbearance.. refusing to update

trnj88 — Thu, 21 Apr 2016 03:59:10 GMT

If you wouldn't mind, would you PM me (or post here) an overview of what you said in your dispute? I have sent both an online and USPS mailed dispute for the issue, both times including a copy of the letterhead I have from FedLoan stating the loan was in "General Forbearance" for ALL of the periods during which I was reported late.

Their response both times has been, "We have verified with FedLoan that the reporting is accurate." They keep leaving it up to FedLoan to "verify" the reporting, and they're continuing to verify it as accurate.

I just sent a third dispute CMRRR. If this also gets the same canned response I'll probably hire a lawyer.

Re: FedLoan reporting lates when my account was in a forbearance.. refusing to update

readytoclimb — Mon, 02 May 2016 18:54:46 GMT

Pls update this board when you get a response to let us know what the end result was. I'm eager to know myself. I'm about to send the letterheads to the CRA's showing forbearance periods as well.

Re: FedLoan reporting lates when my account was in a forbearance.. refusing to update

Anonymous — Thu, 05 May 2016 01:00:26 GMT

exact same issue with fedloan where i do have 10 loans with 4 being late 90 days

Experian no response, Equifax updated nothing and added statement saying payment deferred, TransUnion is crazy deleted 9 out of 10 completely and left one loan only which is crazy.

oh BTW they were late in 2012

Re: FedLoan reporting lates when my account was in a forbearance.. refusing to update

trnj88 — Thu, 05 May 2016 01:09:43 GMT

My first round of disputes was rejected entirely-- all three bureaus "confirmed" the reporting was correct according to FedLoan and did not correct anything. Lates still present.

I immediately sent three new disputes with a different approach. This time around I didn't mention anything about "My account shows late, but I was in forbearance." That seems to never work. Instead, I simply said, "My account tradeline is not accurately reflecting the fact that there was no payment due for the following months: X, Y, Z"... and sent a copy of the letter I have from FedLoan.

Guess what? Within a week I already had a reply from TransUnion. ALL lates removed and my tradeline was entirely updated to "OK" status. HUGE success here, there were multiple 60, 90, 120, and a 150 day late on there. Now it is entirely clean. Woohoo!!!

Experian and Equifax have not yet responded. But 1 for 1 so far with this new approach.

It seems like if you mention the account showing late, but should have been in forbearance, they will investigate it more deeply.. but if you simply mention "My account does not reflect that no payment was due. Please update my tradeline immediately according to the dates on the attached form", they will be more inclined to do it. CRAs are probably afraid of the word "late", and probably feel more obligation to investigate it.

Just something to try for those of you having tough luck. I'll update again once EQ and EX respond.

Re: FedLoan reporting lates when my account was in a forbearance.. refusing to update

Anonymous — Tue, 31 May 2016 21:15:56 GMT

Any updates?

I have a series of lates from July-December 2013 on 11 tradelines with FedLoan Servicing (consolidated in 2014, currently reporting as closed and paid). Later, I got a retroactive forbearance that applied to August-December 2013.

I disputed on EQ a few weeks ago and attached the letter from FedLoan saying the loans were in forbearance from August-December, and said that no payments were due then per the attached letter.

Got the results back today, EQ says FedLoan verified the payment information and didn't update anything.

trnj88, any updates on your disputes with EX and EQ? If you were able to get these removed from all three bureaus, I'm going to try filing new disputes this week.

Re: FedLoan reporting lates when my account was in a forbearance.. refusing to update

Anonymous — Wed, 08 Jun 2016 06:29:15 GMT

http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/FedLoan-Late-payments-Removed/td-p/4318509

Check out this post!

Re: FedLoan reporting lates when my account was in a forbearance.. refusing to update

Anonymous — Fri, 10 Jun 2016 03:16:34 GMT

I am going to have to try this dispute method.

Re: FedLoan reporting lates when my account was in a forbearance.. refusing to update

trnj88 — Mon, 13 Jun 2016 03:45:16 GMT

Sorry guys I've been a bit AWOL from the forums.

Update: EQ and EX both denied my dispute again. Also, I noticed that within two weeks my TU tradeline edits were BACK to being negative for ALL of the entries that had been removed. Every single negative that had been removed from my TU tradeline as part of my dispute was reinserted with no notice to me.

I disputed the reinsertion and received a denial letter claiming, "Your dispute was either illegible or did not contain information".. What? What a joke. So all of my TU lates that were taken off are now back on my report, I was not given any notice before or after the reinsertion (it's now been a few weeks), and my dispute for the reinsertion was rejected.

Looks like it's time to lawyer up.. very tired of dealing with all of this! I will fire off one last dispute to all three CBs while I look for a lawyer. Anyone in the NJ area who knows a good lawyer, let me know!

Re: FedLoan reporting lates when my account was in a forbearance.. refusing to update

Anonymous — Sun, 19 Jun 2016 14:51:48 GMT

I sent FedLoan Servicing a rather strongly worded letter yesterday stating that their refusal to remove lates on my account when a forbearance was later applied to cover those dates is in violation of FCRA 623(a)(2), and included the FTC opinion that states furnishers are required to report updated information, even if the original reporting was correct at the time it was reported.

In the letter, I gave 'em 14 days to update the reported history or I will escalate to CFPB and FTC, and/or pursue legal action.

Gonna see if anything comes of this round. If not, guess it's on to round #4, by my count.

EDIT: Here's the FTC advisory opinion I cited, and here's the letter I sent:

This correspondence is in response to the February 16, 2016 letter I sent regarding my goodwill request to have late payments removed from my credit score report. By failing to update previously reported information, FedLoan Servicing is in violation of Section 623(a)(2) of the FCRA.

I have attached an FTC advisory opinion which interprets Section 623(a)(2) of the FCRA. The issue posed in the advisory opinion is how a lender is to handle a situation when subsequent information updates a report that was allegedly accurate when it was made but no longer is accurate in the present time (i.e., the identical situation I am currently in).

The advisory opinion states that 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. In particular, this section requires a person that “has furnished to a consumer reporting agency information that the person determines is not complete or accurate” to “promptly notify the consumer reporting agency of that determination” and provide any information needed to make it complete and accurate. Thus, on its face, this provision requires a furnisher to provide corrected or updated information to the consumer reporting agency that it had reported to originally. 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.”
FedLoan Servicing communication regarding retroactive forbearances states “If the forbearance was applied retroactively to cover a period of delinquency, any information previously reported to each nationwide consumer reporting agency will remain.” However, Section 623(a)(2) clearly shows that the reports must be updated/corrected regardless of whether they were accurate at one point.

All of my FedLoan accounts that were part of the July-December 2013 late payments show forbearance status from from 02/28/2013 through 01/27/2014. Therefore, my credit reports do not currently accurately reflect previous payment statuses as FedLoan Servicing has recorded them. I am thus requesting that in compliance with Section 623(a)(2) of the FCRA that the accounts showing late payments in July-December 2013 be updated and/or corrected and removed.

In the event that these reports are not immediately updated to accurately reflect my current payment status during July-December 2013, I intend to file official complaints with the FTC, CFPB, and pursue other legal routes if necessary.

Please respond within 14 days of the date of this letter with an update to this matter.

Very Truly Yours,

habu987

Re: FedLoan reporting lates when my account was in a forbearance.. refusing to update

Anonymous — Sun, 19 Jun 2016 14:00:09 GMT

Very interested to hear the result.

Re: FedLoan reporting lates when my account was in a forbearance.. refusing to update

Anonymous — Mon, 25 Jul 2016 14:52:58 GMT

The first letter I sent to FedLoan Servicing apparently never got delivered, according to USPS. Sent another one and the 14 day deadline I gave FedLoan Servicing passed on Thursday with nary a peep from them.

I filed a complaint with the CFPB on Friday, going to file a complaint with the FTC tomorrow.

Hopefully this time I'll see some sort of action!

Re: FedLoan reporting lates when my account was in a forbearance.. refusing to update

trnj88 — Mon, 25 Jul 2016 15:15:13 GMT

I tried the CFPB route with FedLoan, and apparently because it is a Federal student loan they will not handle it.. I'm still scratching my head on that one.

Here is the response I got from the CFPB when I sent in my dispute:

----------

We reviewed your complaint and found that because your complaint involves a Federal student loan, the Department of Education would be the best agency to help with the issue you described. We have forwarded your complaint to them and closed your file here.

If you have questions about your complaint or to get an update on its progress, contact the Department of Education at:

https://studentaid.ed.gov/repay-loans/disputes/prepare/contact-ombudsman

(877) 557-2575

U.S. Department of Education
FSA Ombudsman
830 First Street, NE
Fourth Floor
Washington, DC 20202-5144

----------

So all the CFPB will do is forward your case to the Ombudsman (i.e. a dead end). After trying every other method (PFB, a dispute with the CFPB, asking FedLoan to update their records) I have found that the ONLY method giving ANY potential is a credit bureau dispute. Hopefully you have better results! Please keep us informed!

Re: FedLoan reporting lates when my account was in a forbearance.. refusing to update

Anonymous — Tue, 23 Aug 2016 19:58:42 GMT

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. I guess it's time to hire a lawyer!