Most college students look to federal loans to fund their education, however, this often isn’t enough. As a result, people turn to privately funded loans to cover their education expenses. These loans typically originate at a bank who, in turn, transfers the loan to National Collegiate Funding LLC. This company holds the loan until it is transferred into a trust. One group, called the National Collegiate Student Loan Trust (NCSLT), is made up of 15 different trusts. They hold a significant number of student loans, about 800,000, and worth about $12 billion, according to a New York Times report.
Who is NCSLT and what do they do?
The NCSLT packages private student loans and sells them to investors. Being privately-backed loans typically carry high-interest rates, a lot of money is generated. Most people who have taken out private student loans have no idea a third party, such as NCSLT, is involved. The servicer they pay their monthly bills to is not the owner of the trust. Not to mention, students don’t know where their loans end up because the NCSLT doesn’t provide documentation to show who owns the student loans.
NCLST initiating lawsuits
A portion of the student loans held by the NCLST, worth about $5 billion, is at the center of a massive legal dispute. The NCSLT has been aggressively suing borrowers across the U.S. who have defaulted on their loans. Most cases, which have the trust listed as the plaintiff, are problematic because they:
- Don’t show a chain of ownership
- Contain incomplete information
- List inaccurate information (i.e. students in schools they never attended)
These lawsuits have been compared to the subprime mortgage fiasco that emerged after the housing bubble burst.
Why Georgia residents need to be defended by a consumer law attorney
Student loan borrowers are vulnerable because few consumer protections are in place to help them and the NCSLT takes advantage of this. They pursue legal action to bully borrowers into paying, relying on the fact many borrowers don’t show up to court and the trust wins by default. Borrowers who fight back usually see the cases dropped. Many judges across the U.S. throw these cases out of court due to the poor paperwork, fuzzy details of ownership and an overall lack of transparency.
To date, the NSCLT has sued 5,000 Georgia residents. Aside from the inaccuracy problems associated with these trusts, these lawsuits don’t align with Georgia law. Georgia’s Constitution limits the judicial power of its courts because the legal title to property held in trust must be linked to an owner. Georgia law states a trust is a non-entity and, that being the case, the NCSLT doesn’t have the right to sue Georgia residents. These NSCLT lawsuits are frivolous, improper and illegal.
A consumer law attorney will ensure your rights are protected and defend you when the NCSLT tries to bully you into paying extraordinary amounts—sums you may not even owe. For more information, give us a call today.
Reposted from the “Ask Consumer Ed” article from the Georgia Attorney General’s consumer protection unit.
Dear Consumer Ed:
Can a utility company charge me for a previous tenant’s utility bills? I am a new tenant in a rental home. The owner passed away last year, and apparently after the medical bills were paid, there was no money left in the estate. I am now being told that I cannot get electricity or water service until these bills are paid. Who is legally responsible – me or the estate that is financially broke at this point?
Consumer Ed says:
While we cannot give legal advice, as a general rule, a tenant in a residential property who has no connection to a previous occupant is not responsible for paying the utility bills attributed to the previous occupant’s use.
Furthermore, if you are renting a house, the utility provider may be prohibited from denying you service because of the previous tenant’s unpaid bills.
For example, Georgia law prohibits a public or private water company from refusing to supply water to a new residential tenant because the prior owner or occupant owes it money.
With regard to electricity, if your power company is regulated by the Georgia Public Service Commission, it is prohibited from denying you service on the basis of a previous occupant’s unpaid bill. If your provider is a municipally-owned electric system, you would have to either refer to your city’s code of ordinance or contact your municipal utilities department. Similarly, if your provider is an electric membership corporation (EMC), you would have to contact your local EMC provider to inquire about the rules and regulations that apply to you.
If a utility company insists that you are responsible for the previous occupant’s bills or refuses to give you service until those bills are paid, you may want to ask it to show you in writing where the Public Service Commission or other authority permits it to take this action. The utility companies may simply need to update their billing records to reflect that a new tenant will be occupying the home and start up the utilities under your name.
If you unable to resolve this situation, you may want to consult an attorney about your options.
Re-posted from the Georgia Department of Law’s Consumer Protection Unit.
Dear Consumer Ed:
I just heard about a security hack that left my Social Security number out there. How can I protect myself?
Consumer Ed says:
Identity thieves use Social Security numbers for a variety of purposes: to file tax returns, to apply for government benefits, to obtain employment, to open credit cards, bank accounts and/or take out loans, or get medical care. If you think your Social Security number was compromised during a hack, follow these steps:
Contact the Social Security Administration. An identity thief may use your Social Security number to get work. If the employer then reports that individual’s income to the IRS using your Social Security number, you might have issues later because it will appear as though you didn’t report all of your income to the government. You can contact the Social Security Administration to review your earnings record by calling 1-800-772-1213 or visiting www.socialsecurity.gov/myaccount.
Contact the Internal Revenue Service (IRS). An identity thief who has used your Social Security number to obtain a job or file a tax return might try to change the address on file with the IRS in order to have a tax refund sent directly to him or her. To contact the IRS Identity Protection Unit, call 1-800-908-4490 or visit www.irs.gov/uac/Identity-Protection.
Place a security freeze with each of the three credit bureaus. A security freeze (also known as a “credit freeze”) locks your credit file so that no one can see your credit report or credit score unless you lift the freeze. Since banks and lenders access your credit file in order to determine whether or not to extend credit to you, a security freeze will prevent an identity thief from using your information to get a credit card or loan. You will need to contact each of the credit bureaus to place the credit freeze:
Get copies of your credit reports. You can get free credit reports each year by going to annualcreditreport.com. Review your reports carefully. If you come across any accounts or collection items that you do not recognize, contact the credit bureaus to dispute the matter and get it resolved. Note that under federal law, you are entitled to one free credit report each year from each of the three major credit bureaus. Georgia residents are entitled to an additional two free credit reports per year from each of the bureaus.
For more information, visit the Georgia Attorney General’s Consumer Protection Unit’s website at www.identitytheft.georgia.gov.
[Reposted from the “Ask Consumer Ed” column of the Georgia Attorney General]:
I have been placed as a co-signer on a student loan for my grandson. I never signed for this loan. When I contacted the loan provider they told me that I “e-signed” for this loan. I don’t know what information was provided to verify my identity, but now I am on the hook for $95,000. What can I do to rectify this since I never signed the loan?
Consumer Ed says:
In Georgia, the law on e-signatures is governed by the Uniform Electronic Transactions Act, which means that electronic signatures are guaranteed the same force and legal-effect as traditional paper signatures. That being said, basic contract law still applies, so for you to be bound to the contract, both parties must have the intent to form a contract, have notice of the transaction terms, and give proper consent to the terms.
When determining the enforceability of a particular electronic signature, the context, actions and circumstances of the parties are taken into account. Authentication of a signer’s signature is critical here. The loan provider must show proof that the agreement was actually signed by you. If the signature is being disputed in court, evidence such as the signer’s IP address or the use of an email account can be used to verify the identity of the signer. In some instances, courts have found e-signatures unenforceable where, for example, someone else routinely uses the computer (IP address) that the signer uses.
It is important to know what it means if the loan is enforced against you. By co-signing a loan, if your grandson stops making payments, you will have to make the payments for him. The law in Georgia says that a lender can immediately start collecting from a co-signer if the borrower misses a payment. Also, if your grandson misses any payments, this can also hurt your credit score.
If you did not sign for the loan then you should contact an attorney to discuss your options.
There are several types of liens that can be attached to a person’s property. Each has a different expiration date, and if successfully enforced, could result in the sale of your property to obtain the amount of the lien from the proceeds (with any remaining funds going to the property holder). While this list is not exhaustive, the most common types of liens are:
A state tax lien occurs when taxes are due to the state, or to counties of the state, or other special tax districts of the state. State tax liens don’t expire, and the only way to get rid of them is to pay the amount owed-otherwise, when you sell your home, the state will collect the amount owed from the proceeds of the sale.
A federal tax lien is one that the federal government can use when you fail to pay a tax debt. A federal tax lien exists after the IRS puts your balance due on the books (assesses your liability), then sends you a bill that explains how much you owe (Notice and Demand for Payment) after you fail to fully pay the debt in time. The lien continues until it is paid, or it expires. Generally, the IRS has ten years to collect after it is assessed. The IRS can extend the ten years under two different circumstances. First, the statute of limitations can be extended if you enter into an installment agreement; this extends the expiration date to 89 days after the installment agreement expires. The second is a release of levy with an agreement to extend the statute of limitations to a specific date, provided the extension date hasn’t passed. A release of levy may be given if the lien is creating an immediate economic hardship. This doesn’t mean you are excused from paying what is owed, only that you will be given some leeway to make the payments. The IRS will generally work with you to establish a payment plan or other steps to help you pay off the balance.
A judgment lien is created when a judgment is obtained in superior, magistrate, or other state courts. This lien can become unenforceable after seven years, if the lien holder doesn’t seek to enforce the lien by providing public written notice of its efforts, and by including the names of the parties to the enforcement action, the nature of the action, and having it recorded in the court. The lien holder is able to re-record the judgment every seven years to keep it enforceable; however, if the lien holder fails to re-record the lien within the seven year period, he or she has only three years after that expiration date to re-record it. If the lien holder fails to re-record during the three years, he or she is barred from enforcing the judgment.
A laborer’s lien is a lien filed by a person who provides services under a contract for manual labor or physical work. The lien can only be for the work performed, and cannot include any materials provided (but these would fall under a materialman’s lien, described below). The lienholder must go to court to obtain a judgment against you within twelve months, or the lien becomes unenforceable.
Mechanic’s or materialman’s lien
A mechanic’s or materialman’s lien is a type of lien that contractors, subcontractors, and others who have contributed services and/or materials to improve a new or existing home can file against a homeowner’s property if they do not get paid, even if the homeowner paid the general contractor. Liens like this don’t go on your credit report, and expire within 12 months unless the subcontractor or contractor actually files a lawsuit to collect the money.
Above all, don’t be pressured into paying for goods or services you never ordered. Many of these so-called “invoices” appear at first glance to be legitimate bills, and may include threatening or confusing legal jargon to create a false sense of urgency to pressure recipients into making quick payments. Scammers are hoping that you’ll simply pay the bogus bills without checking them out.
Another variation on the phony invoice is a solicitation that is designed to look like a bill. It may contain a required legal disclaimer that says in large boldface type: “THIS IS NOT A BILL. THIS IS A SOLICITATION.” Unfortunately, this disclaimer is often absent or obscure. If you’re deceived into paying for the solicitation, you may never receive the goods and services advertised, and will probably have little to no luck in contacting the company, let alone getting them to refund your money. If you don’t see the above disclaimer, don’t assume it’s a legitimate invoice.
The following are steps you should take to avoid falling into this trap:
Verify. Search the name of the company sending you an invoice to see if others are reporting similar issues or other problems. Check a company out with the Better Business Bureau (www.bbb.org), and also try doing an online
search using the company name and words like “complaint” or “scam.”
Carefully read all invoices and solicitations that are sent to you. Check account numbers and the name of the company sending you an invoice. If you do receive a bill that appears to be legitimate, or from a legitimate company, look it over carefully for the name and location of the company sending the bill. If there is any difference (no matter how small) between the name of the business entity which sent the “invoice” and the name of a legitimate business, this is likely an indication that the invoice is phony.
Contact the company. If you ever question an invoice that you have received, call the number on the invoice. Legitimate businesses will have direct contact information, and will welcome questions. Ask for a purchase order or other supporting documents. An inability to contact the sender at the number provided is also an indication that the bill is a fake.
File a complaint. If you’re getting bogus bills, file a complaint with the FTC at www.ftc.gov/complaint, as well as with the Better Business Bureau. If the scheme involved and/or was sent to you via the U.S. mail, submit a Mail Fraud Complaint Form to the U.S. Postal Inspection Service. You also should alert the Georgia Department of Law’s Consumer Protection Unit online at www.consumer.ga.gov, or by calling 404-651-8600.
[Reposted from www.publicjustice.net]
By Leslie Brueckner, Senior Attorney
The U.S. Supreme Court is poised to decide an issue of huge importance to everyone who cares about access to justice. The question, in Campbell-Ewell v. Gomez, is whether corporate defendants in class actions are entitled to bribe class representatives to abandon the rest of the potential class members.
Yes, you read that right. According to the corporation who was sued, it should be allowed to cancel out a class action against it simply by offering to settle the named plaintiff’s individual claims. Under the defendant’s view of the law, corporations accused of ripping off millions of people could avoid accountability by repeatedly picking off the few named plaintiffs who are willing to step forward. Campbell-Ewell has even gone so far as to argue that class representatives are bound by such offers, accepted or not, even if it effectively denies all other class members the ability to obtain any relief at all.
The craziest part about the theory they’ve put forth is that it turns the whole notion of adequacy of representation 180 degrees. As we explained in an amici brief we just filed with the Court (along with the AARP), one of the most basic rules of class actions is that class representatives are supposed to represent the others impacted by the wrongdoing. Not only is this required by Rule 23 (the federal class action rule), it’s also required by the U.S. Constitution (due process, anyone?). This means not just that the class representatives are supposed to be competent, they are also supposed to be loyal to the rest of the class members. And that means the class representatives are not supposed to file potential class actions just to make money for themselves, they are supposed to be standing up for everyone in the class.
But if Campbell-Ewell’s lawyers are to be believed, the basic ethical and constitutional premises of class actions were just flipped. They say that corporate defendants in class actions have the right to bribe class representatives to abandon everyone else. And in their view, even if a class representative wants to do the right thing and reject an individual payday so they can stand for the entire class, Rule 68 strips away that possibility, and the court must dismiss the whole case for lack of subject matter jurisdiction.
If the Supreme Court agrees with Campbell-Ewell, it could spell disaster for the ability of injury victims to obtain any compensation whatsoever via class action suits. Class actions make it economically possible for injured consumers, civil rights plaintiffs, and low-wage workers to pursue claims for relatively small damage amounts for wrongs that would otherwise go unremedied. A Supreme Court ruling that would allow defendants to shut down class actions simply by “picking off” named plaintiffs could wipe countless cases – and countless consumers and others who would benefit from those cases – off the litigation map.
Hopefully, the Court will see this tactic for what it is: a form of bribery that turns the very idea of class representation on its head.
– See more at: http://www.publicjustice.net/content/us-supreme-court-decide-whether-class-action-defendants-can-bribe-their-way-out-legal-troubl#sthash.9w6nHSVt.dpuf
Reposted from the “Ask Consumer Ed” article of the Georgia Governor’s Office of Consumer Protection:
A: Your frustration is understandable. Leases can be overwhelming, even to those accustomed to reading them. Georgia’s Department of Community Affairs has a Landlord-Tenant Handbook available on its website (www.dca.ga.gov) that can give you some guidance, but in particular, here are some important things you should look for before you sign:
- Rent and length of the lease – While the landlord may have told you the basic information about the lease, it is important to get the key terms such as monthly rent and length of the lease in writing. This protects you from later changes in price or terms.
- Utilities – Leases can differ dramatically in this area. Determine if you are required to place the utilities in your name, pay the landlord for utilities, or if they are included in the rent. This can have drastic impacts on the cost of the apartment, so you need to know upfront what you are obligated to pay.
- Security deposit – Most apartments require a security deposit when signing the lease. Find out how much this is and what will be deducted when you move out. Most landlords conduct an inspection before you move in and after you move out to check for damages and deduct the repair costs from the deposit.
- Termination and renewal procedures – The lease should state what happens at the end of the lease term. This includes the deadlines and procedures for notifying the landlord that you are either moving out or extending your lease. Be aware of any automatic rent increases that occur if you decide to renew the lease.
- Subletting and Subleasing – It is important to know whether you have the ability to leave the
apartment before the lease is up. Leases are often commitments for a year or more and landlords have different rules regarding your ability to lease to another person should your circumstances change.
6. Pets – Some landlords do not allow pets, while others may restrict the number, size or type of pets permitted. Many will charge a pet deposit, which may or may not be refundable. Make sure you are clear about these terms and have budgeted for any additional deposit due.
7. Renter’s Insurance – Remember that your landlord’s insurance does not cover your belongings, only the building itself. If your furniture or belongings are damaged due to fire, theft, or a natural disaster, you’ll be out of luck if you don’t have renter’s insurance. The good news is that renter’s insurance is very affordable, and you can generally purchase it from the same company that insures your vehicle.
Even though a lease can be long and complicated, you should always read it thoroughly before signing it. Be wary of a landlord who seems in a rush for you to sign before you’ve read through the entire document. If you cannot understand the terms of the lease, have someone who is familiar with lease agreements, or an attorney, review it with you to make sure that you fully understand what you are agreeing to before you sign the lease. Do not leave any blanks to be filled in later. Either get them filled in or cross through them, initial each cross-out and have the landlord do so also. Finally, insist upon getting your own copy of the lease, and save it so that you can review your rights and responsibilities should a dispute ever arise.