Consumer complaint received 2017-01-04
Company: CITIZENS FINANCIAL GROUP, INC.
State: CA
Product: Student loan
Sub-product: Non-federal student loan
Issue: Dealing with my lender or servicer
Sub-issue: Having problems with customer service

Complaint:
I took out a private student loan in XXXX with Citizens bank ( or possibly a bank that was acquired by Citizens ) as the underwriter. I never missed XXXX payment on the loan. Unfortunately my cosigner filed for bankruptcy in XXXX. Little did I know that the loan contract contained an automatic default clause. I logged in to make my regular payment every month ( please see the payment history attached which ends in XXXX XXXX - the dates are especially important ). When I logged in XXXX XXXX to make a payment, it was the first time I saw that the loan was in default. I did not understand why it was put in default so I called XXXX. XXXX told me about the automatic default clause if a cosigner files for bankruptcy. I had to figure out who was handling my loan. It turns out the underwriter ( Citizens Bank ) was now handling the loan ( specifically the Bankruptcy department ). 
I was told by their bankruptcy department that they executed the auto default clause. They stopped all communication with me and said that the loan had been charged off even though I never missed a payment. I understand that bankruptcy law allows for an automatic stay so that Citizens Bank could not ask me for payments while the bankruptcy was ongoing. Even with the automatic stay I called their bankruptcy department and regularly made payments that were above the monthly minimum payment when the loan was in good standing. I asked them several times why they charged this loan off when I was making all my payments and they said the automatic default clause is just that, it gets executed automatically. 
While I was making payments I spoke with bankruptcy staff and asked them how this would be reported on my credit. They said they were n't allowed to report to credit agencies during a bankruptcy. After the bankruptcy ended, the loan was transferred to asset recovery. The last staff member I spoke to in the bankruptcy department before the loan was transferred to asset recovery told me that this loan would never be reported on again to the credit agencies because of the bankruptcy. When I spoke to asset recovery staff they told me that this loan would be reported as a chargeoff within XXXXXXXX days, which is completely different from what the staff in the bankruptcy department told me. Now I have been paying regularly on this loan even through the bankruptcy. I even offered to pay the entire balance off in XXXX payment as long as they would commit to not reporting this as charged-off to the credit agencies. I spoke with XXXX supervisor and he said to call him back at a specific time on a specific day. When I did they said he was n't available. I then called back once a week to inquire and each time they would not let me speak to a supervisor when I asked. When I asked asset recovery why would they do something like this to someone who was paying on time and never missed a payment. They said because of the default. When I explained that automatically defaulting on a student loan because of cosigner bankruptcy is possibly illegal considering what spokesmen from the CFPB have said about that practice in XXXX, the XXXX staff person tried to backtrack and say that the default was due to missed payments in XXXX. They changed their story and started saying that this was in default and charged off because of missed payments in XXXX ( Please see the attached letter from the Office of the Chairman stating that the loan was charged off in XXXX XXXX - an obvious discrepancy, the payment history from XXXX says the loan was charged off in XXXX XXXX - they were trying to change the story and say that it 's because of missed payments and not because of a bankruptcy, but my payment history shows that I never missed a payment ).

Company response to consumer: Closed with explanation