A man from a Pittsburgh suburb has been awarded $300,000, paid by Navient, after it was ruled that the student loan company was harassing him with robocalls in an effort to have the man repay his student loans.
Paul DeMuth, a Harmarville, Pennsylvania resident, had fallen behind on his student loan payments due to extenuating circumstances, and that is when the calls from Navient, the nation’s largest student loan company, started coming in.
Audio records from the robocalls made from Navient to DeMuth show that the DeMuth repeatedly told Navient to stop calling, but that warning had little impact. In one instance, DeMuth received a robocall and told the caller that he spoke with Navient yesterday and to stop calling him (DeMuth) and his cosigner.
Six hours later, DeMuth’s phone was ringing again because of a Navient robocall. This time, DeMuth told the other end of Navient’s robocall to stop calling because it was encroaching on the borderline of harassment.
After Navient refused to heed DeMuth’s warnings, the Pennsylvania native filed suit. An independent arbitrator concluded that Navient made 200 unauthorized robocalls to DeMuth over the course of two years.The arbitrator went on to say that Navient made the calls knowingly or willingly, and he or she ordered the student loan servicer to pay DeMuth a total of $300,000.
With that in mind, each unauthorized call made to DeMuth was worth $1,500. DeMuth’s student loan debt balance was $15,700; the student loan balance will be subtracted from the money awarded in the settlement.
Amy Ginsburg, Paul DeMuth’s attorney, stated the following: “It’s pretty clear in Paul’s case, those calls were knowingly and willingly made because the recordings were pretty clear that he was telling them, ‘Don’t call me,’ and they continued to call.”
When prompted for an interview or comment regarding the case, Navient declined. However, Navient did say DeMuth never took away his consent to allow the robocalls, rendering all calls appropriate and legal. Navient is planning to fight the ruling made by the arbitrator.
This is not the first time that Navient, the biggest student loan company in the U.S., has found itself in troubled legal waters; additionally, it isn’t the first time they plan to fight back either.
LendEDU covered a lawsuit earlier in 2017 that was filed against Navient when the Consumer Financial Protection Bureau (CFPB) alleged that the student loan servicer cheated borrowers by establishing obstacles to repayment, leading to higher student loan balances and greater interest.
In response, Navient asserted its innocence, claiming that the CFPB “invents new rules from whole cloth and claims that Navient failed to comply with them in the past.” Building on that statement, Navient made the claim that it was completely compliant with Department of Education regulations under the Higher Education Act. In fact, Navient went on to say that any issues experienced by its borrowers stem from disorganization within the Department of Education. Navient might have a point to say the least given that the CFPB’s allegations must derive from federal consumer financial laws.
At any rate, the legal issues haven’t stopped Navient from conducting business. The servicer recently purchased a portfolio of $7 billion in federal and private student loans from J.P. Morgan. The move increases Navient’s stake in the student loan industry at a time when the Department of Education is motioning for a system change; more specifically, the Department wants to implement a system that involves only one student loan servicer.
Author: Mike Brown
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