Student Loan Scam.

[Lowexpectations]

Originally Posted by Coldjensens

There was no error. They did this intentionally. The purchaser of the loan notified us that they had bought it. The notice had the amount that we owed prior to the COVID hiatus. We contacted them and told them the amount was incorrect. They said this was the amount they purchased. A plethora of calls and long waiting on hold later, and the original company admitted that they had taken the payments we made during the COVID hiatus and put them into a different account. They did not credit the loan and did not transfer that different account to the buyer when they sold the loan. They said they would transfer the funds soon This was months ago. Maybe even a year. Since that time we have twice tried to contact both companies to confirm this has been straightened out. They do not respond. We are still trying.



However straightening it out now does nothing to change the fact that they illegally took our money and used it for a different purpose.



There is no getting around taking money that we paid toward the loan and putting it someplace else is fraud period. They are given the money only for payment on the loan. They can apply it to the loan or return it to us. That is the only thing that they can do with our payment.They cannot use it elsewhere.


I think I have a pretty good idea of what fraud is. (Let me ask a lawyer - yep he says I am correct). Perhaps you have no idea what fraud is. There many different kinds of fraud. Not all fraud is criminal or actionable. Sometimes it is harmless, but it is still fraud.



Let me use an analogy to help your understand. You tell me that if I give you $3, you will go buy me a cup of coffee. Instead you take the $3 and put it in your bank account. You may later claim that you intended to save the money for three years and then give it back to me, but your have still committed fraud.



When I have an agreement to Pay XCo money for paying a student loan and they do anything with my payment other than applying to the loan or sending it back to me - that is fraud. This is not a mistake. They did not inadvertently do anything. They knowingly took our loan payment and put it in a different account. They did not tell us they were doing this, nor did they get our permission to do so. Telling us they were doing this does not get them off the hook. They needed our permission to put out money into some other account.



When they told us that if we make payments to them, they will apply it to the loan - then doing anything with those payments, other than applying them to the loan is fraud. It is not very complicated.



Then they sold the loan and kept our money in their account. Leaving our loan balance at the amount it was before we made a year or more of payments. Yup - that is theft. They may eventually give the money back to us, but they still stole it. If you steal my car reasonably but mistakenly thinking it is your car - not theft. If you steal my car mistakenly thinking I will not mind if you steal my car for a week - yup, that is theft. Mistake is not a defense in the latter case. to claim a mistake or simple error, they would have to have not known it occurred, or not known the money was ours. Neither is true. They knew it was our money and they knew that they were putting into some other account rather than applying it to the loan. This was not an instance whether they punched in the wrong number for an account. They intentionally put these payments into another account. Maybe they thought it was OK to do this, however that is also not a defense. They knew that they did not have our permission.



There was no reason, and no justification for them to put that money in another account. None. They likely had a reason - perhaps they were earning interest on it, or using the money as part of their reserves. Whatever their reason they were not allowed to do it.



If the accounts have not been transferred and applied to the loan, we are also being charged interest on the money that we already paid. Giving it back because we caught them does not make it OK to do that.

Do you work for Sallie Mae? That would explain your attack, but you need to check your authorities. You are completely wrong.

You have failed to demonstrate any fraud has occurred. If you did, why did t the attorney you check with take it up legally for you? Mmm maybe because 1. You didn’t reach out to an attorney and 2. If you did there’s no case

[Lowexpectations]

Originally Posted by Coldjensens

They cannot put our money in their outage account without our permission to do so. That is the fraud. You cannot simply take someone else money that is paid to you based on your representation that it will be put to a specific use, and put it wherever you choose.



There is no due diligence for us to do. We have no due diligence obligations here (that is a securities term and has nothing to do with personal banking). No one has any obligations to do "due diligence" on their loan payments. My obligation is to make payments. The lenders obligation is to apply those payments to the loan. Until they apply those payment, the lender holds those funds in trust as a fiduciary. That is it. There are no other obligations.



The did not credit the loan. I do not know, but I believe that they continued to report it to credit reporting agencies in the full amount and use our money for their own purposes without our permission. Banks, including lenders are fiduciaries. They absolutely cannot do this.


As I said when we learned of this, we called them out on it and they said they would transfer/credit the funds. When we asked them to confirm this had been done, they did not respond. (Written inquiries = no response. Telephone so far = we have to get back to you. Then they didn't.


I have no way to check their recorded balance other than what they report to credit agencies and shows up on Credit Karma. The reporting still shows the old amount of the loan. If they have online banking account like a mortgage or a credit card it is not set up. We have never had any reason to set up an online account for this loan. Years ago we had to confirm the balance and get an accounting of all the payments - it was a lengthy ordeal and had to be done by mail. I do not remember the details.


They did not start taking the monthly payments again and we are sitting on a glob of money to pay down the loan once they will apply our payment to the loan and not take it, but we cannot get them to respond.



There is no way to use honey or vinegar. They do not respond. If we call, after a half hour(ish) on hold they tell us they will have to get back to us. Then they do not get back to us. We are still working on getting through to them on this, but we should not have to do so. They acted wrongfully. They had a simple job - collect payments, apply them to the loan. It is not our job to fix the mess they created. It was not their money to use for whatever they used it for at least not until is was applied to the loan.


Banks cannot do this. It is very illegal.

Due diligence isn’t a securities based term
You must have never had your mortgage sold ever because you clearly aren’t aware how how depositing funds works when accounts are sold

You are just swinging wildly and I’m not sure your story is complete, yet

[Coldjensens]

Originally Posted by KaraG

I'm wondering too. I'm assuming you paid online - you couldn't tell your balance wasn't going down?

No we do not pay online. It is a fixed monthly amount with the option of paying by automatic transfer or by check. Until the loan was sold it was paid by automatic transfers. When we make extra payments, we send them a check. There is no online balance to see. You have to order a statement if you want one. Frankly it is not a balance we would pay much attention to. We were only alerted to the issue when the purchaser of the loan sent us a notice that they were now the owner of the loan and payments were to be made to them. The notice had the loan amount on it and it was wrong.



We probably could have caught this earlier on Credit Karma if we checked Credit Karma regularly, but we don't. We really do not care whether our credit rating is 825 or 830. It makes no difference.



We really do not watch our mortgage closely either. It really does not matter. Like the student loan, the payments are the exact same amount every month. They are automatic. We know the payments over X years will pay off the loan. The only reason that will ever vary is if we make extra payments, but we no longer make extra payments on the mortgage because the interest is substantially lower than investments pay - even a savings account.



My truck payment is the same. I woudl have paid it off, except the interest rate is so low, it does not make sense to do so. So, we just let the automatic payments ride and do not check the balance. At the end of X years, it will be paid off. In between, we really do not need to know the balance.


So no. I have no idea what the balance is on any of these accounts. I do not need to know. All of the accounts, except the student loan, I can simply open my online banking and see it if I want to, but I do not have any need to do so. We get a yearly tax statement on the mortgage with the balance on it. I checked my car loan balance when I had the money to pay it off, but decided to put the money into savings instead. I do not need to know the current balance. I know the date that it will be paid off.

[oneasterisk]

Sorry you're going through this but it could have been quickly caught if you kept track of your balance either through statements or an online portal. I use Mint and it can track your balance of car or mortgages and I bet school loans. It's a good aggregator and allows you to see a fuller picture of your assets and liabilities from a single pane