Consumer complaint received 2023-01-26
Company: Goal Structured Solutions, LLC
State: MI
Product: Debt collection
Sub-product: Private student loan debt
Issue: Attempts to collect debt not owed
Sub-issue: Debt is not yours

Complaint:
Launch Servicing LLC is attempting to collect money from me on an illegal contract, a financial product called an Income Share Agreement ( ISA or ISAs ). I entered into this contract on XX/XX/2020, but have since discovered that my ISA is considered void and unenforceable under Indiana state law ( and most state laws ). I have been advised to file this complaint due to the fact that " servicing void and unenforceable ISAs is an unfair, deceptive, and abusive act or practice, '' and that " servicing void and unenforceable ISAs violates state consumer protection and student loan servicing laws. '' I am also filing complaints against XXXX XXXX and XXXX XXXX, the other two parties involved who devised and issued these ISAs. 

These ISAs are in violation of several state and federal laws, and as such, are void and unenforceable under Indiana law where XXXX XXXX is headquartered. Specifically, Indiana Code 24-4.5-3-502 requires lenders to obtain proper licensure and Indiana Code 24-4.5-5-202 states that a contract or obligation that violates this chapter is void and unenforceable. Neither XXXX XXXX nor XXXX XXXX had lending licenses while they were issuing these private education loans. As such, I am requesting that a formal investigation be opened into XXXX XXXX and Launch Servicing LLCs operations in the state of Indiana, and that all affected students be released from these unenforceable and fraudulent private student loans. Id also like to note that while XXXX XXXX is referenced in this request, they no longer appear to be in business, presumably due to lawsuits brought against them for furbishing ISAs. The material facts are as follows : XXXX XXXX is a covered person under XXXX2 U.S.C. 5481 and the ISAs they employed are considered private education loans under 12 C.F.R. 1026.46 ( b ) ( 5 ). The ISAs they devised and distributed with XXXX XXXX did not include the required disclosures outlined in 12 C.F.R. 1026.46 ( b ) ( 5 ), and also included an illegal prepayment penalty in violation of 15 U.S.C. 1650 ( e ). XXXX XXXX misrepresented the nature of these ISAs in their marketing and business practices, and was not a properly licensed lender when the loan contract was signed, violating XXXXC 24-4.5-3-502 and several provisions under IC 24-2.5-10-1 ( a ). Furthermore, they did not secure a self-certification form as required by 12 C.F.R 1026.48 ( e ) and provided a private education loan that did not conform to federal consumer financial laws. 


I was a student of XXXX XXXX in XXXX and would never have signed up in the first place had I known the extent to which they intentionally skirted consumer protection and usury laws. I was misled by their representations that the ISA was not a student loan and would not affect my credit. The contract for this loan states in bold print that, THIS IS NOT A LOAN OR CREDIT and THIS INCOME SHARE AGREEMENT IS NOT A LOAN OR CREDIT. THIS AGREEMENT IS NOT AN ASSIGNMENT OF WAGES. The agreement and marketing materials stated that there was a {$100.00} commitment fee, with {$0.00} tuition and a repayment of 13 % of my income for 48 months. However, the ISA included a funded amount equal to the tuition, with a prepayment penalty equal to what the contract calls a payment cap. Despite the contract stating that it was not a loan or credit product, my credit report shows an account from Launch Servicing LLC categorized as either student loan or education loan depending on the agency. This is a violation of 12 U.S.C. 5481, 12 U.S.C. 5536, and 15 U.S.C. 1650 ( e ), which renders the contract void and unenforceable under Indiana law, specifically IC 24-4.5-5-202. Launch Servicing does appear to have the proper lending licensure in Indiana, but is still in violation of IC 24-2.5-10-1 ( a ) and IC 24-4.5-5-202 ( 2 ) for servicing void and unenforceable ISAs, and creating the deceptive impression that a debt is owed. Several courts have already endorsed the position that servicing loans that are void or unenforceable under state law is an unfair and abusive act. 

I find it unacceptable that XXXX XXXX, XXXX XXXX, and Launch Servicing LLC have engaged in such fraudulent and delusory practices towards vulnerable segments of the population. I would appreciate your prompt attention to this matter and look forward to a resolution that will release me and my fellow students from these usurious and fraudulent loans. 

The following is a ( likely incomplete ) list of the statutes violated : - Indiana Code 24-4.5-3-106 - Definition of a loan Indiana Code 24-4.5-3-502 - Indiana Code 24-4.5-5-202 - Indiana Code 23-2.5-10-1 - 12 U.S.C. 5481 - 12 U.S.C. 5536 - 15 U.S.C. 1650 ( e ) - 12 C.F.R. 1026.46 ( b ) ( 5 ) - 12 C.F.R 1026.48 ( e )

Company response to consumer: Closed with explanation