Last week, a Virginia federal jury concluded a group of lawyers had engaged in racketeering with companies that ostensibly offered student debt-relief services. In reality, those companies acted to recruit borrowers for lawsuits under the Telephone Consumer Protection Act (TCPA), according to a report in Legal Newsline.
Student loan servicer Navient was awarded a $2.2 million verdict in litigation against Champion Marketing Services (CMS), GST Factoring, a California law firm, and several individuals that the jury perceived as having played a role in the scheme. Navient alleged in its litigation that these companies and the law firm recruited student loan borrowers, convinced them to stop making loan payments in order to draw calls from Navient, then worked with those borrowers to file TCPA suits against the loan servicer.
Also according to Navient’s litigation, CMS sent mailers that advertised its debt counseling but instead fed borrowers’ info to the lawyer defendants. CMS had borrowers sign an attorney retainer and set up an auto-debit program to pay lawyers “unearned monthly fees.”