Consumer complaint received 2023-04-01
Company: MOHELA
State: IL
Product: Student loan
Sub-product: Private student loan
Issue: Dealing with your lender or servicer
Sub-issue: Trouble with how payments are being handled

Complaint:
On or about XX/XX/XXXX, I refinanced my student loan, previously held at XXXX XXXX XXXX ( hereinafter XXXX ), through XXXX XXXX XXXX ( hereinafter XXXX ). The remaining balance of the student loan held at XXXX on or about XX/XX/XXXX was {$23000.00}. XXXX issued a payoff to XXXX in the amount of {$23000.00}, resulting in an overpayment of {$150.00}. 

On or about XX/XX/XXXX, XXXX issued a refund to XXXX in the amount of {$150.00}, the amount of the overpayment. On or about XX/XX/XXXX, I received an e-mail from XXXX stating an overpayment refund in the amount of {$150.00} has been applied to your XXXX loan. In the subsequent weeks, I noticed the overpayment refund had not been applied to my XXXX loan. On or about XX/XX/XXXX, I submitted an inquiry through the XXXXMohela online messaging portal regarding the discrepancy. On or about XX/XX/XXXX, I received a reply from Mohela through the online messaging portal stating, in relevant part, Our Accounting Department stated that your lender ( XXXX ) requested the payment of {$150.00} that was posted on your account effective XX/XX/XXXX be removed on XX/XX/XXXX. We are not certain as to why, so we have submitted a lender review request to XXXX to inquire. Approximately two weeks passed without a resolution or response ; therefore, I submitted another message through the online messaging portal inquiring about a status update. On or about XX/XX/XXXX, I received a reply from Mohela stating they would follow-up with XXXX. On or about XX/XX/XXXX, I received a message through the online messaging portal from Mohela stating, in relevant part, XXXX responded with the following : The refund check from XXXX in the amount of {$150.00} that was received on XX/XX/XXXX was returned on XX/XX/XXXX per their request. XXXX stated they are unaware of a specific reason for this request, but suggest that you reach out to XXXX for this detail. 

After receiving the reply from Mohela on or about XX/XX/XXXX, I contacted XXXX and spoke with a representative. XXXX stated they never requested that the funds be returned. Additionally, they stated that their records showed the payment was negotiated by XXXX and cleared their bank. I then contacted XXXX and spoke with a representative. The XXXX representative stated the funds were sent back to Mohela on or about XX/XX/XXXX. Additionally, they stated it can take up to 10 days to appear on my account. Approximately two weeks passed without resolution and the funds were not applied to my account. On or about XX/XX/XXXX, I submitted another message through the online messaging portal inquiring about the status of the funds. On or about XX/XX/XXXX, I received a reply from Mohela stating, in relevant part, As previously stated the funds were requested to be returned to XXXX on XX/XX/XXXX and were returned on XX/XX/XXXX according to the message received from XXXX. We have forwarded your message today to XXXX and will respond to you once we have a response from XXXX. 

On or about XX/XX/XXXX, I received a message from Mohela through the online messaging portal stating, in relevant part, Per XXXX : The payment was removed because XXXX placed a stop payment on the check. We had to process a reversal of the payment since the funds didnt settle. I subsequently contacted XXXX to inquire about the stop payment on the check and spoke with a representative. XXXX stated they did not stop payment on the check and confirmed that the check was negotiated by XXXX. Additionally, XXXX provided me the image of the check negotiated by XXXX. I then contacted XXXX again with this information and spoke with a representative. The representative provided no resolutions and said they would follow-up with me at a later date. To date, I have received no resolution to this issue and the {$150.00} owed to me has not been applied to my XXXX loan. 

On or about XX/XX/XXXX, I mailed a letter to XXXX including the exact details laid out above. I also provided them a copy of the negotiated check that I obtained from XXXX. In the letter, I requested resolution of the issue by XX/XX/XXXX and notified them of my intent to file a complaint with CFPB if no resolution was received by that date. To date, I have received no acknowledgement or reply to my letter. 

On XX/XX/XXXX, I submitted another message through the Mohela messaging platform again requesting resolution of the issue and notifying them that I am filing a formal complaint with CFPB regarding this matter. 

Based on the documentation provided by XXXX showing that the funds were paid to XXXX and the check was negotiated by XXXX and based on the lack of documentation offered by XXXX and Mohela to contradict this information, I am left to surmise that either XXXX or Mohela misappropriated these funds. While the amount of funds in my particular situation are not substantial in an isolated context, I'm left wondering how many other borrowers have experienced the same thing and have either not noticed or have been exhausted with the process of trying to get it resolved. If this is a standard occurrence, with the number of borrowers I can only imagine that XXXX and Mohela service, the amount of misappropriated funds would no doubt be substantial to the benefit of XXXX and/or Mohela.

Company public response: Company believes it acted appropriately as authorized by contract or law
Company response to consumer: Closed with explanation