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Regulators crack down on dubious debt collectors | News, Sports, Jobs

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In this Aug. 6 file photo, New York State Attorney General Letitia James takes a question at a news conference in New York. During a Tuesday media conference call on an initiative, dubbed “Operation Corrupt Collector,” James offered frank advice to older people who are often seen as easy marks for dubious debt collectors. “Senior citizens, as I always say, they’ve earned the right to hang up and to be rude,” James said. “Most seniors are not rude, but when it comes to individuals engaging in illegal conduct, they should hang up and report the collector to the FTC immediately.” (AP photo)

NEW YORK — Those mysterious debt collectors who call insisting you’ll be in legal peril if you don’t pay them big bucks are in hot water themselves, accused in a nationwide crackdown of harassing and threatening consumers including seniors, often about debts that don’t actually exist.

The Federal Trade Commission on Tuesday highlighted enforcement actions filed in recent months against two South Carolina-based debt collection firms accused of bilking people out of a combined $17.2 million, as well as settlements with three other firms accused of using pressure tactics and other shady practices.

Ironically, the firms that agreed to financial settlements were unable to pay the full amounts.

While consumer complaints about debt collectors have dropped slightly since the start of the coronavirus pandemic in March, the commission’s consumer protection chief, Andrew Smith, anticipates that will change as collectors increasingly target people experiencing crisis-related financial hardship.

Of more than 85,000 debt collection complaints from consumers this year, the FTC said nearly half pertained to debts that didn’t exist or to abusive and threatening practices.

“Now would be about the time that this would start — that we would start to see consumer complaints associated with financial distress caused by the pandemic,” Smith said. “This might be debt collection complaints; it also might be complaints about various credit repair organizations or debt relief, mortgage relief and debt settlement.”

The commission, working with other federal agencies and authorities in 16 states, is also launching a campaign to give consumers tips on what to do when confronted with a debt collection call. It includes a tip sheet with potential red flags, such as a collector refusing to provide the name of his or her company, the amount of debt or the original creditor.

New York Attorney General Letitia James, who joined a media conference call on the initiative, dubbed Operation Corrupt Collector, offered frank advice to older people who are often seen as easy marks for dubious dialers.

“Senior citizens, as I always say, they’ve earned the right to hang up and to be rude,” James said. “Most seniors are not rude, but when it comes to individuals engaging in illegal conduct, they should hang up and report the collector to the FTC immediately.”

James’ office was involved in two of the three settlements featured in the crackdown. Both companies based in the Buffalo area were permanently banned from the debt collection industry under agreements reached in December and February.

One of the companies, Hylan Asset Management, was ordered to pay a $6.75 million judgment but had that slashed to just $676,575 because of an inability to pay. The owner of the other company, Campbell Capital LLC, had its $1.7 million judgment slashed to $30,000.

In the two pending cases in South Carolina, filed in July, authorities have obtained temporary restraining orders halting the companies’ operations, freezing their assets, and putting them under the control of a receiver.

National Landmark Logistics LLC and Absolute Financial Services, LLC, both based in Fort Mill, South Carolina, are accused of using deceptive robocalls and trickery such as claiming to be from a mediation or law firm rather than a debt collector, threatening legal action and using a target’s personal information to make it seem as though the threats were real.

According to the FTC, National Landmark Logistics LLC took in more than $12 million through the tactics, while Absolute Financial Services LLC pocketed more than $5.2 million. In many cases, the commission alleges, National Landmark Logistics had no right to collect the debt it sought or there was no debt to collect in the first place.

A lawyer for National Landmark Logistics LLC declined comment. A message seeking comment was left with a lawyer for Absolute Financial Services LLC.

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Are Sallie Mae Student Loans Federal or Private?

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When you hear the name Sallie Mae, you probably think of student loans. There’s a good reason for that; Sallie Mae has a long history, during which time it has provided both federal and private student loans.

However, as of 2014, all of Sallie Mae’s student loans are private, and its federal loans have been sold to another servicer. Here’s what to know if you have a Sallie Mae loan or are considering taking one out.

What is Sallie Mae?

Sallie Mae is a company that currently offers private student loans. But it has taken a few forms over the years.

In 1972, Congress first created the Student Loan Marketing Association (SLMA) as a private, for-profit corporation. Congress gave SLMA, commonly called “Sallie Mae,” the status of a government-sponsored enterprise (GSE) to support the company in its mission to provide stability and liquidity to the student loan market as a warehouse for student loans.

However, in 2004, the structure and purpose of the company began to change. SLMA dissolved in late December of that year, and the SLM Corporation, or “Sallie Mae,” was formed in its place as a fully private-sector company without GSE status.

In 2014, the company underwent another big adjustment when Sallie Mae split to form Navient and Sallie Mae. Navient is a federal student loan servicer that manages existing student loan accounts. Meanwhile, Sallie Mae continues to offer private student loans and other financial products to consumers. If you took out a student loan with Sallie Mae prior to 2014, there’s a chance that it was a federal student loan under the now-defunct Federal Family Education Loan Program (FFELP).

At present, Sallie Mae owns 1.4 percent of student loans in the United States. In addition to private student loans, the bank also offers credit cards, personal loans and savings accounts to its customers, many of whom are college students.

What is the difference between private and federal student loans?

When you’re seeking financing to pay for college, you’ll have a big choice to make: federal versus private student loans. Both types of loans offer some benefits and drawbacks.

Federal student loans are educational loans that come from the U.S. government. Under the William D. Ford Federal Direct Loan Program, there are four types of federal student loans available to qualified borrowers.

With federal student loans, you typically do not need a co-signer or even a credit check. The loans also come with numerous benefits, such as the ability to adjust your repayment plan based on your income. You may also be able to pause payments with a forbearance or deferment and perhaps even qualify for some level of student loan forgiveness.

On the negative side, most federal student loans feature borrowing limits, so you might need to find supplemental funding or scholarships if your educational costs exceed federal loan maximums.

Private student loans are educational loans you can access from private lenders, such as banks, credit unions and online lenders. On the plus side, private student loans often feature higher loan amounts than you can access through federal funding. And if you or your co-signer has excellent credit, you may be able to secure a competitive interest rate as well.

As for drawbacks, private student loans don’t offer the valuable benefits that federal student borrowers can enjoy. You may also face higher interest rates or have a harder time qualifying for financing if you have bad credit.

Are Sallie Mae loans better than federal student loans?

In general, federal loans are the best first choice for student borrowers. Federal student loans offer numerous benefits that private loans do not. You’ll generally want to complete the Free Application for Federal Student Aid (FAFSA) and review federal funding options before applying for any type of private student loan — Sallie Mae loans included.

However, private student loans, like those offered by Sallie Mae, do have their place. In some cases, federal student aid, grants, scholarships, work-study programs and savings might not be enough to cover educational expenses. In these situations, private student loans may provide you with another way to pay for college.

If you do need to take out private student loans, Sallie Mae is a lender worth considering. It offers loans for a variety of needs, including undergrad, MBA school, medical school, dental school and law school. Its loans also feature 100 percent coverage, so you can find funding for all of your certified school expenses.

With that said, it’s always best to compare a few lenders before committing. All lenders evaluate income and credit score differently, so it’s possible that another lender could give you lower interest rates or more favorable terms.

The bottom line

Sallie Mae may be a good choice if you’re in the market for private student loans and other financial products. Just be sure to do your research upfront, as you should before you take out any form of financing. Comparing multiple offers always gives you the best chance of saving money.

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Tips to do some fall cleaning on your finances

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Wealth manager, Harry Abrahamsen, has five simple ways to stay on top of the big financial picture.

PORTLAND, Maine — Keeping track of our financial stability is something we can all do, whether we have IRAs or 401ks or just a checking account. Harry J. Abrahamsen is the Founder of Abrahamsen Financial Group. He works with clients to create and grow their own wealth. Abrahamsen shares five financial tips, starting with knowing what you have. 

1. Analyze Your Finances Quarterly or Biannually

You want to make sure that your long-term strategy is congruent with your short-term strategy. If the short-term is not working out, you may need to adjust what you are doing to make sure your outcome produces the desired results you are looking to accomplish. It is just like setting sail on a voyage across the Atlantic Ocean. You know where you want to go and plot your course, but there are many factors that need to be considered to actually get you across and across safely. Your finances behave the exact same way. Check your current situation and make sure you are taking into consideration all of the various wealth-eroding factors that can take you completely off course.

With interest rates very low, now might be a good time to consider refinancing student loans or mortgages, or consolidating credit card debt. However, do so only if you need to or if you can create a positive cash flow. To ensure that you are saving the most by doing so, you must look at current payments, excluding taxes and insurance costs. This way you can do an apples-to-apples comparison.

The most important things to look for when reviewing your credit report is accuracy. Make sure the reporting agencies are reporting things actuary. If it doesn’t appear to be reporting correct and accurate information, you should consult with a reputable credit repair company to help you fix the incorrect information.

4. Savings and Retirement Accounts

The most important thing to consider when reviewing your savings and retirement accounts is to make sure the strategies match your short-term and long-term investment objectives. All too often people end up making decisions one at a time, at different times in their lives, with different people, under different circumstances. Having a sound strategy in place will allow you to view your finances with a macro-economic lens vs a micro-economic view. Stay the course and adjust accordingly from a risk and tax standpoint.

RELATED: Financial lessons learned through the pandemic

A great tip for lowering utility bills or car insurance premiums: Simply ask! There may be things you are not aware of that could save you hundreds of dollars every month. You just need to call all of the companies that you do business with to find out about cost-cutting strategies. 

RELATED: Overcome your fear of finances

To learn more about Abrahamsen Financial, click here

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How to Get a Loan Even with Bad Credit

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Sana pwedeng mabura ang bad credit history as quickly and easily as paying off your utility bills, ‘no? Unfortunately, it takes time. And bago mo pa maayos ang bad credit mo, more often than not, kailangan mo na namang mag-avail ng panibagong loan. 

Good thing you can still get a loan even with bad credit, kahit na medyo limited ang options. How do you get a loan if you have bad credit? Alamin sa short guide na ito. 

For more finance tips, visit Moneymax.

 

 

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