Allied Interstate Hit with FDCPA Lawsuit over Student Debt Collection Practices

Any student pursuing a postsecondary education can apply for federal government-subsidized student loans. In the 2014 fiscal year, students borrowed approximately $100 billion through federal loan programs. However, as college tuition goes up and the job market goes down, many students default on their loans. This lack of payback not only impacts the government, it is a huge area for debt collection, and collector harassment. The latest alleged victim of these aggressive debt collection practices is New York plaintiff Emilie Thomas.

Thomas alleges in a new lawsuit against Allied Interstate Inc. that she incurred a student loan debt with Sallie Mae, which she then defaulted on. The loan, being unpaid, was sent to Allied Interstate, a collection agency. Around November 2013, Allied Interstate began calling Thomas at her work, in an attempt to collect on the student loan, she claims.

During the first of these calls, they allegedly contacted her company’s Human Resource (HR) department, asking for confidential employment information. This is against the Fair Debt Collection Practices Act (FDCPA) and an invasion of Thomas’ privacy, her lawsuit claims.

Subsequent calls were not much better, as the defendant allegedly threatened Thomas’ income. Her FDCPA lawsuit states that she was told that “she needed to set up a payment arrangement and to be considered for a rehabilitation loan program or they would proceed with the garnishment of her wages starting the first of the year.”

Thomas set up payment arrangements and told the company not to contact her place of employment unless they called her direct line, and only in the case of late payments, she claims.

Allied Interstate, however, ignored her requests, the FDCPA lawsuit alleges. They allegedly contacted Thomas around January 2014 regarding her paperwork. When they could not reach her on her direct line, they contacted the main line, announcing the reason for the call, and asked to be forwarded. In July, they repeated the action.

Nowhere in this process did the defendant ever provide Thomas the required written notification, or give mini-miranda warnings on the calls to announce a debt collection call, the FDCPA lawsuit states. All of their actions, however, did cause Thomas to allegedly suffer from “emotional distress.” For these FDCPA violations and for stresses caused, Thomas is suing Allied Interstate for actual and statutory damages, and requesting a jury trial.

The FDCPA lawsuit is Emilie Thomas v. Allied Interstate, Inc., Case No. 1:14-cv-00723-JTC, in the U.S. District Court, Western District of New York.

What is the Fair Debt Collection Practices Act?

Consumer protection acts were established to protect individuals from harassment, whether that be from businesses or other individuals. Approved in 1977 as an amendment to the Consumer Credit Protection Act, the Fair Debt Collection Practices Act (FDCPA) is one such law. It not only protects consumers from debt collection harassment, but also supplies guidelines for how debt collectors run their businesses.

The purpose of the FDCPA is “to eliminate abusive practices in the collection of consumer debts, to promote fair debt collection, and to provide consumers with an avenue for disputing and obtaining validation of debt information in order to ensure the information’s accuracy.”

Under FDCPA guidelines, debt collectors must cease communication upon request, cannot bother consumers at their workplace after being informed that it is unacceptable or prohibited by employers, cannot misrepresent the debt or use deception to collect it, or threaten arrest or legal action. Millions of consumers have suffered financial and emotional hardship from fair debt collection practices act violations.

Join a Free Unfair Debt Collection Class Action Lawsuit Investigation

If a lender or debt collector engaged in unfair debt collection practices, you may have a legal claim and could be owed compensation for violations of the Fair Debt Collection Practices Act (FDCPA).

DISCLAIMER: Debt collection itself is not illegal. However, debt collection firms collecting on consumer debts must adhere to the FDCPA. Even though debt attorneys are investigating these companies, their debt collection practices may be legal.