Debt Collection Company Settles Allegations Of Aggressive Collection Tactics For Old Debts

Lori Kalani, Bernard Nash
Cozen O'Connor
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Cozen O'Connor

  • Massachusetts AG Maura Healey reached a settlement with national debt collection company Transworld Systems, Inc. (“Transworld”) to resolve allegations that it used unfair and deceptive debt collection practices in servicing a variety of debts, including student loans, in violation of Massachusetts consumer protection laws and the Massachusetts AG’s Debt Collection Regulations.
  • According to the assurance of discontinuance, Transworld, which is the primary debt collector for private student loans on behalf of the National Collegiate Student Loan Trusts, allegedly attempted routinely to collect on old, time-barred debts by using false and misleading affidavits against student borrowers and did not provide the required notices of borrowers’ rights. In addition, Transworld allegedly contacted consumers at home and at their place of employment more frequently than the Debt Collection Regulations allow.
  • Under theassurance of discontinuance, Transworld agreed to pay $2.25 million to the Commonwealth and the money may be used for consumer restitution. Transworld also agreed to stop excessive attempts to contact consumers, and to stop improper collection procedures on time-barred debts, including not producing false or misleading affidavits and providing consumers with the requisite disclosures, among other things.

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