Consumer complaint received 2023-06-13
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Trouble with how payments are being handled
Company: Maximus Federal Services, Inc. (MD)

I am the victim of fraud due to Aidvantage botching my student loan payments. 

My wife and I bought a house in XX/XX/XXXX. Our mortgage was through Maryland 's SmartBuy program, which paid off a set amount of our student loans as long as we paid any remaining balance. Consequently, on XX/XX/XXXX, I made a payment to my Aidvantage student loans totaling {$7700.00}, which would have left my remaining balance with Aidvantage at {$2000.00}. Unfortunately, when I requested a payoff verification letter from Aidvantage that would prove my new balance to my creditor and the State of Maryland, Aidvantage gave me a balance that did not reflect my payment at all. As such, I was forced to include in my home closing cost the full balance of my Aidvantage student loans, which would be paid to Aidvantage via my title company, in order to prove to my creditor and the State of Maryland that the loans would be paid off fully. This resulted in a net overpayment to Aidvantage ( i.e., my XX/XX/XXXX {$7700.00} payment plus the amount paid by my title company ). 

For transparency 's sake : due to the above, our home closing costs included an additional {$7700.00}, plus an additional {$950.00} just to be safe and to round our closing cost payment up to an even {$41000.00}, meaning that I believe my overpayment amount to Aidvantage totaled {$8700.00}. 

My understanding was that Aidvantage would automatically return to me the amount of the overpayment. When I did not receive such a credit from Aidvantage, however, I reached out to Aidvantage via telephone on XX/XX/XXXX, at which point they informed me that the balance would be returned to me automatically ; my recollection is that they said it would take 4 to 6 weeks, and that I should call if I did not hear anything in 4 weeks. Therefore, when I still had not received the payment, I reached out to Aidvantage via telephone on XX/XX/XXXX, at which point they assured me that the overpayment amount was indeed going to be sent to me. I was told that the amount had already been sent by check ; I explained that I had not received a check, leading the Aidvantage representative to offer to resend the payment via direct deposit. I explicitly stated that this amount was to be sent to me via direct deposit, and I confirmed this with Aidvantage during this XX/XX/XXXX phone call, when I gave the representative my bank routing and account number and confirmed the payment instructions. At that time, I was told it would take 8 to 10 weeks for the amount to be deposited into my bank account. 

This did not occur, but I tried to give Aidvantage the benefit of the doubt, given that they had been so inefficient when I had talked to them previously ; I assumed the payment was simply taking longer than expected to process. However, when the payment still remained missing, I reached out via telephone on XX/XX/XXXX, to investigate. I was told that the payment had been sent by check, despite our explicit agreement - confirmed with Aidvantage, as previously outlined- to send the payment via direct deposit. When I explained this to Aidvantage, the representative asserted that he would reissue the request for my direct-deposit payment, he took my bank account and routing information, and informed me explicitly that I should expect my payment to arrive by XX/XX/XXXX, as direct deposits were being executed quickly at the time. 

After my payment had still not arrived in the stated timeframe, I reached out to Aidvantage via telephone again on XX/XX/XXXX. However, its automated phone service repeatedly delayed my request until it was past XXXX XXXX, at which point it suddenly informed me that the office was closed. ( I realize this sounds conspiratorial, but the automated service kept playing faux typing sounds for quite some time instead of connecting me to an agent, which it had never done to such an extent in my previous calls, leading me to believe the system was deliberately delaying my call at the end of the office hours. ) I finally reached out again on XX/XX/XXXX, via telephone, and explained my situation to the representative. She informed me that the representative on XX/XX/XXXX had not reissued the payment as he had said, but instead issued a stop-payment order and began an investigation into my payment problems, which was internally expected to be resolved by XX/XX/XXXX. That investigation, which had concluded without my knowledge, found that - despite my aforementioned instructions to the contrary - a payment to me had been issued via check, and furthermore, that the check had been cashed, leading the investigation and my case to be closed by Aidvantage. However, I never received a check, much less cashed it, and indeed had solely expected my payment to come via direct deposit. Likewise, I was told that I had already been sent a copy of that cashed check - a copy which I also had never received ( or had even been informed about ). At that point, the representative informed me that my only recourse was to fill out a Department of Treasury packet ( which she would request to be issued to me ) in order to claim fraud on my account. She also informed me that, though she could not say for sure, it appeared the check was signed with my name on the back. 

Two things are abundantly clear to me at this point. First, I am most certainly the victim of fraud, as a check was cashed in my name without my knowledge- and indeed, without my ever knowing that there was a check to cash, much less receiving such a check. Second, none of this ever would have happened if Aidvantage had processed the return of my overpayment according to the instructions that I repeatedly agreed to with their representatives. At multiple points, I reiterated my instructions to Aidvantage 's representatives, and yet the company apparently ignored those instructions repeatedly - and misinformed me about its actions all the while. Additionally, they do not keep a clear record of my payments and the resulting balances on their website, so it is extremely difficult to reexamine the relevant balances and payments within the time period of this ordeal.