National Collegiate Student Loan Trusts Consumer Actions

Michelo et al. v. National Collegiate Student Loan Trust 2007-2 et al. Bifulco et al. v. National Collegiate Student Loan Trust 2004-2 et al.

Frank llp has filed class action lawsuits against National Collegiate Student Loan Trust 2004-2, National Collegiate Student Loan Trust 2006-4, National Collegiate Student Loan Trust 2007-2, and National Collegiate Student Loan Trust 2007-3 (together, the "Trust Defendants"); Transworld Systems, Inc. ("Transworld"), in its own right and as successor to NCO Financial Systems, Inc. ("NCO"); EGS Financial Care Inc. ("EGS"), formerly known as NCO Financial Systems, Inc.; and Forster & Garbus LLP ("Forster") (collectively, "Defendants").

These class actions, filed in the United States District Court for the Southern District of New York, are brought on behalf of all persons sued in state-court debt-collection lawsuits in which a Trust Defendant was named as the plaintiff. The officers and directors of any Defendant, members of their immediate families and their legal representatives, heirs, successors or assigns, and any entity in which any Defendant has or had a controlling interest are excluded from the Class.

Click here for the complaint against Trusts 2004-2 and 2006-4, et al.

Click here for the complaint against Trusts 2007-2 and 2007-3, et al.

There are least fifteen National Collegiate Student Loan Trusts (the "National Collegiate Trusts"), including the four Trust Defendants presently named in these actions. Although consumers might assume that the National Collegiate Trusts directly lend money for student loans, they actually do not. Rather than originating loans, the National Collegiate Trusts are the ultimate owners of bundles of student loan debt following a complex securitization process. These debt-bundles now total $12 billion, with more than $5 billion now classed as in default.

The National Collegiate Trusts-which have no employees-use Transworld to attempt to collect debts allegedly owed on these student loans. Transworld coordinates with law firms throughout the country, including Forster, to file debt-collection lawsuits against consumers in state courts. In the past three years more than 38,000 such actions have been filed.

In September 2017, the Consumer Financial Protection Bureau ("CFPB") penalized the National Collegiate Trusts and Transworld $21.6 million for prosecuting illegal debt-collection lawsuits. The CFPB found that the National Collegiate Trusts and Transworld sued consumers in state courts over purported debts that they couldn't prove were actually owed, or were too old to sue over.

In addition, the National Collegiate Trusts and Transworld allegedly have employed illegal tactics later in the state-court litigation process-specifically, using false or deceptive affidavits to obtain default judgments. The CFPB found that the Transworld employees or agents who fill out affidavits filed on behalf of National Collegiate Trusts have falsely attested to personal knowledge of (1) the account records and the consumer's debt, and (2) the chain of assignments establishing entitlement to sue. In fact, these individuals robosign the affidavits without reviewing any such evidence.

Frank llp's recently filed class action lawsuits allege that the Defendants' misconduct amounted to violations of, among other law, the Fair Debt Collection Practices Act ("FDCPA") and the New York General Business Law ("GBL").

If you have ever been sued in a debt-collection lawsuit filed on behalf of any National Collegiate Trust, and you have any questions or wish to discuss your rights or interests with respect to these matters, please contact us.

Contact:
Frank llp
Gregory A. Frank
(800) 497-8076
(212) 682-1853
investigations@frankllp.com
www.frankllp.com