Mother Pays Off Navient Loan Years Before and Hit With $92K Collection Bill Anyway

This suit filed against Sallie Mae Student Loan Corporation, Ascension, Navient, Equifax Information Services, Pioneer Credit Services, Trans Union, and Experian Services Corporation would be unbelievable if all the facts asserted are proven true.

I’ll keep an eye on this suit but for now, here is what we do know.

In Texas, in December 2020 Cynthia Riddle, through her attorney, filed a Fair Credit Reporting Act (FCRA) and Fair Debt Collection Practices Act (FDCPA) suit against the above-named companies.

The lawsuit alleges that Riddle had fully paid off a Sallie Mae Parent loan in 2015 but is now being chased for $92,92,459 anyway.

While I’d love to say this is an exception, it is another in a list of complaints of incorrect data in the servicing of student loans leading to angst.

The case states:

“6. Navient is falsely reporting a student loan debt on Plaintiff’s Equifax, Experian and Trans Union credit reporting files with incorrect late payments and remarks.

7. On or about 2004, Plaintiff applied for a Sallie Mae Parent loan in the amount of $32,470.94, for the benefit of her son, Tyler Riddle, to attend The Art Institute and then enroll at TCA, a Le Cordon Blue Accredited University in Austin, Texas, and later to attend Texas Culinary, at which time Plaintiff was led to believe that such a degree, credits, and school affiliation would be fully transferrable for further or continuing education.

8. Plaintiff began repaying the Sallie Mae student loan debt in 2008 (year three of a ten-year deferment option).

9. Plaintiff made regular payments by automatic draft through Prosperity Bank.

10. The last payment made to Sallie Mae was made in September 2015.

11. As of September 12, 2015, Plaintiff had paid off the entire student loan debt.

12. Since September 12, 2015, Plaintiff never received any verbal or written
correspondence from any entity regarding the student loan debt as she believed it had been paid in full.

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13. On August 19, 2016, Plaintiff received a letter from Defendant Navient which stated that there was a new account balance for the student loan of $73,928.81 with a new 4.25% fixed interest rate.

14. On November 14, 2016, Plaintiff received a collection letter from Defendant Pioneer stating that the student loan was in default and collections, and that the balance due was $92,459.52.

15. On December 6, 2016, Plaintiff sent a demand letter to Defendant Pioneer to suspend any and all correspondence with Plaintiff to expunge the debt with a paid in full standing, remove all delinquent inquiries from all three credit bureaus, and issue a notarized letter stating that the student loan account was paid in full and closed.

16. Plaintiff patiently waited more than 60 days for the trade lines to be updated showing that she had no balance remaining on the student loan debt. After she had waited long enough and had provided sufficient time for the Defendants to take corrective action of the disputed the trade lines with Defendants Equifax, Trans Union, and Experian. A true and correct copy of Plaintiff’s demand letter to Defendant Pioneer is attached hereto marked Exhibit “A” and incorporated herein by reference.

17. On May 26, 2020, Plaintiff sent another demand letter to Defendant Navient in which she once again demanded that her credit file be updated and corrected, and that the enormous student loan debt be deleted. A true and correct copy of Plaintiff’s May 26, 2020 letter to Defendant Navient is attached hereto marked Exhibit “B” and incorporated herein by reference.

18. As a direct and proximate result of the Defendants’ negligent and/or willful failure to comply with the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq., Plaintiff has suffered credit and emotional damages. Due to the Defendants’ failure to correct the errors in her credit file, Plaintiff has suffered credit denials and has been forced to refrain from applying for new credit or more favorable terms on existing credit lines.

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19. As of the date hereof, the falsely reported student loan debt is still being reported on all three of her credit reporting files.” – Source

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