Attorney General James Stops Debt Collection Company from Unlawful Practices Harming Thousands of Student Borrowers

Posted to Applied Web NY on Mon, 09/14/2020 - 10:20

NEW YORK – New York Attorney General Letitia James today announced that she has secured protections for thousands of student borrowers who defaulted on student loans and who were subject to misleading and unlawful actions by Transworld Systems, Inc. (Transworld), one of the nation’s largest debt collectors. The agreement resolves an investigation of Transworld — the principal debt collector for the National Collegiate Student Loan Trusts — after the Office of the Attorney General (OAG) found that Transworld violated multiple federal and state consumer protection laws by making false, misleading, and deceptive statements in National Collegiate Student Loan Trusts lawsuits and in communications with borrowers, and for filing these lawsuits beyond the applicable statute of limitations. Under the settlement agreement, Transworld has agreed to make significant changes to its debt collection practices and to pay $600,000, which will be disbursed as restitution to New York borrowers and/or penalties to the state.

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