Consumer complaint received 2017-05-09
Company: ECMC GROUP, INC.
State: UT
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:
In speaking wit h two a ccount representatives,  one by th e name of  XXXX , employee ID :  XXXX , and another  XXXX , employee ID :  XXXX , at  Educational Credit Management Corporation about first-time student loan rehabilitation, both employees lied that the collection fees would be capitalized in the  loan balance and that the fees would be transferred to the new lender once I completed loan rehabilitation. I repeated asked them to confirm this on a recorded call and they insisted this was true, in order to collect commissions on those fees. I had found, however, documentation from the  Student Federal Aid  website stating otherwise.   XXXX   XXXX   XXXX   #  XXXX   Quoted  below :  XXXX   XXXX   XXXX  : What is the current policy for collection fees and rehabilitation?   - Does the balance in a rehabilitation agreement include collection fees and, if so, what is the formula for adding fees to that balance/how are they calculated?   - Does the loan holder take a portion of the rehabilitation payment for collection fees? If so, how much?   - Are fees capitalized in the balance after a successful rehabilitation? If so, how much?      XXXX  : This response applies to Department-held loans ( both  FFEL and Direct Loans ). If the borrower is assigned to a PCA, collection fees are charged against each of the nine qualifying payments ; approximately 20 % of each payment would apply to collection fees, with the rest applying to interest and/or principa l. Once full eligibility for rehabilitation has been achieved, only the principal and interest balance of the loan is transferred to a non-default servicer. From that point forward, no further collection fees are charged unless/until the borrower re-defaults on the loan. In the event of re-default, collection fees are charged according to the same rules as if the loan were a first-time default. Collection fees are not capitalized in the rehabilitation process. Collection fees are only capitalized if a borrower consolidates the defaulted loans.    [   XXXX   XXXX   XXXX   ] Thi s collection agency is teaching their representatives to lie to borrowers to collect larger fee amounts when it clearly states here the federal rules which govern loan rehabilitation fees. You can hea r three recor ded conversations on   XXXX   XXXX   XXXX   around roughly  XXXX  MST confirming these facts.   I would like to enter loan rehabilitation without paying any fees to this deceitful agency, including the standard 20 % through the  nine  monthly loan rehabilitation payments, because their representatives repeatedly lied. Additionally, I think an investigation in to ECMC 's tr aining practices should be conducted because I bet their representatives regularly lie to borrowers to collect larger fees and commissions. Finally, I think th e two r epresentatives ought to be fined and given unpaid leave for a period of 60 days. It is a disgrace that this company and these people try to steal from and deter students trying to do the right thing by entering into loan rehabilitation.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation