NJ Attorney General Sues National Student Loans Officer for Deceptive Practices | Goodwin
On October 20, 2020, New Jersey Attorney General Gurbir S. Grewal (“NJ AG”) and the New Jersey Consumer Division ad that they brought an action in a New Jersey state court against a national student loan service for unreasonable business practices, deception and misrepresentation made to thousands of New Jersey consumers, in violation of the New Jersey Consumer Fraud Act, NJSA 56: 8-2.
The NJ AG has filed a lawsuit following receiving approximately 1,000 consumer complaints and an investigation into the company, which allegedly revealed that representatives at the company’s call center pushed the borrowers Towards costly forbearance instead of more appropriate income-based repayment plans, the company failed to inform borrowers about timelines to recertify their eligibility for income-based repayment plans, and the company induced borrowers in error about the amount they were past due in order to receive advance payments. the complaint also alleges that the company encouraged borrowers to take out private student loans with a co-signer, and then made it difficult for borrowers to release co-signers on their loans later.
The NJ AG seeks restitution of those affected, restitution, statutory civil penalties, legal costs and fees, as well as an injunction.