Consumer complaint received 2018-01-04
Company: GREAT LAKES
State: IA
Product: Student loan
Sub-product: Federal student loan servicing
Issue: Dealing with your lender or servicer
Sub-issue: Trouble with how payments are being handled

Complaint:
I make monthly payments of {$370.00} to XXXX XXXX XXXX XXXX XXXX, automatically set to deduct on the XX/XX/XXXX of each month. XX/XX/XXXX I had my monthly payment deducted from my bank account. On XX/XX/XXXX I made a phone call to Great Lakes to make and excess payment on my account. I asked the representative if I could make a payment to completely pay off my remaining three loans sitting at 6.550 % interest. She stated that this would be no problem and that my payment would be {$2800.00} to completely pay off the three separate loans at the interest rate of 6.550 % ( loan # XXXX, # XXXX, and # XXXX ). The excess payment of {$2800.00} was taken from my bank account on XX/XX/XXXX. On XX/XX/XXXX I received an email from Great Lakes stating, " Your Excess Payment Preference Has Expired. '' Due to the holidays I was unable to contact Great Lakes until XX/XX/XXXX. I called Great Lakes customer service on XX/XX/XXXX to question what had happened with my excess payment. They stated that my excess payment of {$2800.00} had not been correctly applied to the three loans ( loan # XXXX, # XXXX, and # XXXX ), and had instead only payed off loan # XXXX completely and partially payed off loan # XXXX and # XXXX. As of XX/XX/XXXX loan # XXXX still had a balance on {$110.00}, and loan # XXXX still had a balance of {$190.00}. I questioned how this could be as I specifically stated which loans I had wanted my excess payment to be applied toward. She responded that part of the excess payment had in fact gone to loans that were not those that had been request and that she would correct the problem and I would be able to see this correction within the standard 2-3 business days. I received a phone call from Great Lakes XX/XX/XXXX to which they explained that the excess payment of {$2800.00} had to first pay off my scheduled monthly payment of {$370.00} before any excess could be used towards the loans of my choosing. This confused me as I had already paid my schedule monthly payment of {$370.00} on XX/XX/XXXX. They said that it was my XX/XX/XXXX payment that had been deducted before any excess payment could be applied. I then asked if I was still scheduled to pay my XX/XX/XXXX payment and they said that I would still be expected to pay {$370.00} as schedule on XX/XX/XXXX. This in my eyes did not add up. While discussing this on the phone I logged into my online account at Great Lakes to look at my loans myself. It was then that I noticed loan # XXXX now had a balance of {$0.00} when just the day before XX/XX/XXXX it had been XXXX ( confirmed by a Great Lakes representative on the phone call placed XX/XX/XXXX ). I then opened loan # XXXX and saw that the balance was now {$300.00} when just the day before XX/XX/XXXX it had been {$110.00}. This was very alarming to me and it had occurred to me that a representative of Great Lakes that I had spoken to XX/XX/XXXX moved {$190.00} from loan # XXXX to loan # XXXX thus putting the loan balance of # XXXX to {$300.00} ( not correcting the error at all, just moving money from one account to another ). I believe that this is fraud. I never once authorized money to be moved from one loan to another. This is alarming to me that Great Lakes would make such changes to loans that were taken out separately, signed for separately and should never be combined or moved without consent of the holder. When I stated my concerns to the account representative from Great Lakes she said she was unable to see if money had been moved from one account to another. She stated that she could only see the current balances of my accounts and unable to see what the balances had been just one day prior. She danced around my questions and tried to make it seem like I was the one who was not understanding the situation. I am concerned that if this is happening now, how many times has it happened without my knowledge? How many times has this happened to other students? I do not agree with any of the practices that have taken place on the part of XXXX XXXX XXXX XXXX XXXX over the passed 7 days and I would like this matter to be looked into immediately.

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