Xerox Ordered to Pay $2.4 Million to Settle Illegal Debt Collection Charges

November 30, 2016 Posted by kingcade

Many of us know Xerox as the company that handles office supplies, printers and similar products.  However, back in 2009 the company acquired ACS and has been operating as a lender of student loans through Xerox Education Services (XES).

The division has come under much scrutiny in the past year for allegedly violating debt collection laws and overcharging borrowers.  Now the company has decided to settle the charges by paying a $2.4 million settlement.

The initial investigation began in December of 2015. After analyzing the company’s loan servicing practices, officials found that XES had failed to properly process applications for federal loan relief associated with the Income-Based Repayment Plan under the Higher Education Act.  This forced student loan borrowers to pay more than they needed on their debt.  They were also hit with more late fees when they could not afford to make their payments.

The company was charged with violating debt collection regulations by making frequent and repeated phone calls to borrowers and not investigating credit reporting disputes. This led to false information being reported to credit agencies.

Under the settlement, XES will pay $2.4 million, which will be be used as restitution for borrowers who tried to apply for relief but were not able to enroll. The company has also agreed to credit late fee overcharges, reform service members’ accounts, stop its illegal debt collection practices, and establish a “Borrower Advocacy Group” that will help loan recipients apply for income-based repayment plans.

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