Consumer complaint received 2022-01-06
Product: Student loan — Private student loan
Issue: Dealing with your lender or servicer — Received bad information about your loan
Company: KEYCORP (NJ)

Hello, I am filing a complaint with KeyCorp, its chartered bank KeyBank National Association, and its loan brand XXXX XXXX as they are providing different loan rate discounts to different customers while providing inconsistent and incomplete information as to whom is eligible. This difference in the loan rate discount will result in over {$25000.00} in additional interest over the life of the loan, and when I contact XXXX XXXX customer support, all they will say is that I am ineligible for the additional discount and nothing can be done. 

In XX/XX/XXXX, I refinanced my graduate student loans with XXXX XXXX based on the referral of a friend from graduate school who had refinanced their XXXX student loans with XXXX XXXX a couple weeks earlier. What made XXXX XXXX interest rate the most competitive is that they offered an interest rate discount if you opened a linked savings account, with the rate of the discount dependent on the balance of the linked savings account ( Original Rate Structure ). The loan type, interest rate, and term I received were exactly the same as my friends and the balanced refinanced was almost the same. Both of us opened linked savings accounts and deposited the amount needed to received the largest interest rate discount. 

On XX/XX/XXXX, the same friend received an email from XXXX XXXX informing him that he was now eligible for a new set of interest rate discounts ( New Rate Structure ) based on the amount in the linked savings account, with the discount increased up to 1.2 % based on the balance ; however, the balance requirements did not change. The email also stated that the increased discount would be retroactive to the loans third billing cycle. The email did not state why he was receiving an increased rate discount. I have attached the email for reference, redacting any information that could identify my friend. 

My friend told me about the email, and asked if I had also received it. When I told him I had not, I asked him to forward me the email, which he did on XX/XX/XXXX. 

The next week ( week of XX/XX/XXXX ), I called XXXX XXXX customer support to inquire as to why I had not received the email and whether my loan rate discount would be adjusted to the New Rate Structure. The customer service representative told me I am not eligible for the New Rate Structure. When I asked why, the representative explained that certain people had seen an incorrect payment amount on a slider on XXXX XXXX website during the loan application process, but pre loan approval and acceptance, and the New Rate Structure was put in place to honor the incorrect amount the people had seen. The representative told me that only these people were being notified about the New Rate Structure and nobody else was eligible. I explained that the email did not mention any error or reason as to why the recipient was to receive the New Rate Structure and I asked again to have the New Rate Structure applied to my loan. The representative told me it was not possible. At this point I asked to speak to manager, and the representative told me that they would forward my inquiry and a manager would contact me. 

The next day, a Member Advocate Team Manager from XXXX XXXX called me regarding my inquiry. She told me she listened to the recording of my call with the customer service representative from the day before and that the representative had provided me with incorrect information. The manager explained to me that the error was that some people had seen an incorrect higher rate on a slider on XXXX XXXX website during the loan application process ( pre loan approval and acceptance ) and that these people were being notified of the New Rate Structure to compensate for the incorrect rate. However, she told me that the rate my friend was currently seeing on his profile was the correct discounted rate, and his discounted rate would not change. I reiterated my understanding that the New Rate Structure was to account for the difference in the slider rate and actual rate, but that his current discounted rate was the correct one, and she confirmed this. At this point I dropped the matter since both my friend and I had the same discounted rate on our accounts. 

The week of XX/XX/XXXX, my friend told me that he checked his account and his rate dropped to incorporate the increased discount as per the New Rate Structure. I was shocked as the manager had previously confirmed to me his discounted rate was correct and would not change. I again called XXXX XXXX and asked to be transferred to the Member Advocate Team Manager I previously spoke to. The customer service representative told me she would escalate my request, but since it was the holidays, not to expect a response until the next week or after the new year. I told the representative that was fine, and explained the situation again. This representative repeated that the rate was New Rate Structure was for people who had seen an incorrect payment amount, not an incorrect rate as the manager previously told me. I said I would wait for the call from the Member Advocate Team Manager. 

On XX/XX/XXXX, I received a call from the Member Advocate Team Manager and I explained to her that my friend had his loan rate adjusted based on the New Rate Structure which was contradictory to what she had previously confirmed to me. She told me that the New Rate Structure was in fact for people had seen an incorrect payment amount on a slider. When I explained that the slider was pre loan approval and acceptance, she said that this was the decision of the company to honor that payment amount and institute the New Rate Structure. I asked if she could confirm that I was not part of this group who had seen the incorrect amount, she said that the proof of confirmation was that I had not received an email. I then asked her for the number of loans affected by this error and the dates when the incorrect payment was shown, and she would not provide me that information. I asked if there was anything that could be done, and she said no. 

Given the lack of rationale in the New Rate Structure email, the inconsistencies about the rationale, continued timing mistakes related to my rate ( which have been separately resolved ), lack of communication about the error, and lack of confirmation that I was not affected by the error, I am suspicious that XXXX XXXX is only applying the New Rate Structure to selected customers. What is even more suspicious is that two customers that applied for the same loan, same term, and approved for the same rate around the same time have different interest rate discount structures. I am requesting an investigation to ensure that the New Rate Structure is applied fairly and wholly to all customers.