In December, the American Association for Justice (AAJ) released their 2018 compilation of major companies and organizations that engaged in poor corporate conduct. These businesses, in an effort to protect their own best interests, put the financial, emotional, and physical well-being of their clients, customers, and students at risk. AAJ highlights the use of many of these corporations’ textbook-style apologies, questioning whether or not these apologies are merely part of the business handbook, or are true attempts at honest remediation.
Apologies are easy. Fixing the way you do business is harder and significantly more expensive. Without the public calling them on the carpet and forcing them to make things right, these businesses will continue to act in their own best interests in order to save face and money. This is where the law comes in. Holding offenders accountable for their actions and forcing them to right wrongs is what protects us as both individuals and as consumers.
First Corporate Offender: Navient
The personal injury attorneys of Levin & Perconti would like to share 7 major organizations and industries that behaved badly in 2018. Each day this week we will highlight one of these groups and the transgressions that landed them on AAJ’s list.
The first company on AAJ’s list is Navient, the third largest student loan debt company. Navient, formerly part of Sallie Mae corporation, has received the most complaints of any student loan servicer. In January of this year, Forbes reported that a major survey showed that of the 4,032 student loan servicer complaints submitted to the Consumer Financial Protection Bureau (CFPB) in 2018, 46% of them were related to Navient. Below you’ll find out how the company’s failure to provide helpful information has hurt Navient borrowers while earning the company billions.
Student Loan Company Pushed Veterans, Cash-Strapped Students Further Into Debt
If anyone has ever taken out student loans, you know the daunting prospect of spending the next 15-30 years paying them back. In 2017, a U.S. Department of Education audit found that Navient was steering its customers into repayment plans that would cost them more. Instead of counseling student borrowers on their options, Navient pushed them directly into these less cost-effective plans. The company was also found to have encouraged something called forbearance. Forbearance is an option in which eligible borrowers can delay making payments until they’re financially back on their feet. The problem with forbearance is that borrowers are still accruing interest on their debt while going months and even years without making a payment. The result is a larger debt balance to ultimately pay off. Estimates say Navient raked in close to $4 billion dollars in interest through just this business practice alone.
Multiple Lawsuits Pending
Another loan option that many working in public service rely on is the Public Service Loan Forgiveness Program (PSLF). As of October 2017, financially eligible borrowers could begin having loans forgiven if they had worked in a public service profession (teachers, firefighters, police officers, or any employee of a non-profit organization or government entity) and had made at least 120 monthly payments through an eligible repayment plan on their loans. Last fall, The American Federation of Teachers filed a lawsuit against Navient, arguing that they intentionally pushed borrowers from eligible public service professions into repayment plans that didn’t qualify for the PSLF program.
The American Federation of Teachers aren’t the only ones to file suit against Navient for shady student loan practices. The state of Illinois, along with California, Mississippi, Pennsylvania, and Washington have each individually sued the company for bad debt practices.
In addition, the Consumer Financial Protection Bureau has also filed their own suit, alleging in their complaint that Navient:
- Fails to correctly apply or allocate borrower payments to their accounts
- Steers struggling borrowers toward paying more than they have to on loans
- Obscured information consumers needed to maintain their lower payments
- Deceived private student loan borrowers about requirements to release their co-signer from the loan
- Harmed the credit of disabled borrowers, including severely injured veterans
Navient’s defense against all of these allegations? Arguing that its employees are not required to counsel borrowers on the best repayment option available to them. So what, exactly, are they there for?
Levin & Perconti: Chicago Personal Injury Attorneys
If you or someone you love has been physically harmed or injured by a “bad” business, let the personal injury attorneys of Chicago’s Levin & Perconti help you. While financial injuries are a different type of harm than a physical injury, the playbook that these corporate offenders all rely on is the same. Putting profits before people and denying and defending themselves against all odds are strategies businesses rely on in every industry.
For nearly 30 years we have protected the rights of victims and successfully recovered over half a billion dollars for clients whom have been harmed by negligent organizations and individuals. Contact us now for a free consultation at 1-877-374-1417 or by completing our online case evaluation form.