Consumer complaint received 2017-05-19
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Trouble with how payments are being handled
Company: National Recoveries, Inc. (GA)

I have three federal student loans currently in default status. I was contacted by National Recoveries collections agency in XX/XX/XXXX stating that their office had received my loans and would like to offer their rehabilitation program to get my loans back in good standing. The program involved me making 10 consecutive monthly payments, after which my loans would be turned over to a new lender. From there i would be in good standing and begin making payments to that lender. I was told that in order to get started I would need to provide my income information to determine the amount my payments would be. I did so, and was given the amount of {$98.00}. This amount would be auto drafted from my checking account on the XX/XX/XXXX of each month. I provided all of this information over the phone, never receiving or provided anything in writing. I was informed that this program would be validated with an official agreement, in which i would receive by delivery service, then sign and returned to their office. I never received any such agreement from the collections agency. However, in XX/XX/XXXX the first payment of {$98.00} was drafted from my account. I did not contact the agency at that time because I thought that at some point I would received the agreement, and I was enrolled in the rehabilitation being that money was taken out of my account. The payments of {$98.00} was then also drafted from my account in XX/XX/XXXX, XX/XX/XXXX, XX/XX/XXXX and XX/XX/XXXX. On XX/XX/XXXX I received a call from a rep with the agency stating that I needed to provide some additional financial information to determine my monthly payments for the rehabilitation program and to sign an agreement. I asked for a further explanation for this request. I was told by the rep that i was not currently enrolled in the rehabilitation program because I only provided one check stub for income verification and I had not signed an agreement. I first asked the rep why it took this long for someone to contact me if there was additional information needed. I then also asked why has money been drafted from my account for 5 months if I am not currently enrolled in the program. He replied by saying the 5 payments of {$98.00} that have been made were going towards my principal balance, and my 10 month program would start once I provide two of my most recent check stubs and sign the agreement letter. I informed the rep that this is some completely different information than what I had received initially. I was only told that my payments of {$98.00} would be for the rehab program. I had no knowledge of my payments going to a principal balance and that I was not actually enrolled in the program. The agency clearly made no efforts to send me the agreement letter, nor make me aware that I was not previously enrolled in the rehab program. However, they were consistently drafting money from my account. It is only now that I am being informed that my payments are going towards something other than what I was told in the beginning. This is a dishonest attempt to collect a debt.