Student loans are no joke. For those who rely on them to complete their education, these loans can soon become significant burdens. Monthly student loan payments often represent large portions of people’s discretionary incomes, and may prevent recent graduates from making key life decisions due to financial instability (marriage, children, homeownership…the list goes on). While cosigners can sometimes ease the burdens on student loan borrowers, they can also create a whole other set of problems (I’ve previously discussed this topic at length…read my prior articles already!).
As if the above issues were not enough, individuals with student debt may also have to deal with a variety of scammers who specifically target vulnerable borrowers. It can be easy to fall prey to student loan scammers, since borrowers are often nervous about defaulting on student loans, and do not want to do anything that may negatively affect their credit. In this article, I will delve into my own personal story of how I almost got scammed, and how I was able to stop the student loan scammers in their tracks.
As I mentioned previously, the bankruptcy of one of my cosigners caused a student loan of mine to be sent to collections. While I was able to renegotiate the payment terms of this loan with the new servicer of the debt, this situation caused me enormous amounts of stress. After a few years of higher monthly payments, I was eventually able to complete the repayment agreement by paying a large final lump sum. This amount was less than the total balance owed, but the owners of the debt seemed more than happy to accept this money upfront than draw out my student loan repayment over several more years.
When this repayment agreement was completed, I made sure to ask for documentation stating that I had completely paid off this debt. Several weeks later, I got a letter in the mail confirming that this student loan had been completely paid off. I quickly stored this letter along with my many other important documents (loan agreements, insurance information, etc.) in a crammed accordion binder. I slept well that night knowing that this ridiculous situation with my cosigned student debt was all over. Or so I thought…
More than three years after this one student loan was fully paid off, I received a strange letter in the mail from a law firm called Forster & Garbus, LLP. This letter stated that my account with the National Collegiate Trust (the student loan that went into automatic default) had been referred to this law firm due to an allegedly outstanding balance. The letter mentioned that my case had not yet been reviewed by an attorney, but there were no other specifics. It did, however, mention that I owed exactly $1,568.30. I noticed that this amount was eerily similar to the remaining balance of the student loan I had paid off under a negotiated repayment plan.
Admittedly, I initially ignored this first letter, attributing it to nothing more than a scam. But when I received the exact same letter two days later, I decided to take action as quickly as possible to get the upper hand in this situation. I tried to call the numbers listed on the letter, but was unable to speak to a real live person. I knew I did not want to have any legal action taken against me, so I then called my esteemed attorney (cough, cough…my brother Jordan).
Within a few days, he sent out a response letter to Forster & Garbus, stating that the debt in question had been paid off. When Forster & Garbus persisted, we sent another letter, insinuating that should this law firm continue to pursue the collections process erroneously, we would reserve our rights to take legal action against the law firm for sending this frivolous correspondence. We also mailed Forster & Garbus a copy of the letter I saved for three years, which proved that the debt had been fully paid off. I have not heard from this firm since mailing the last letter, and there have been no dings on my credit report or any legal actions brought against me by Forster & Garbus.
I was surprised at how this whole situation played out, and I wondered if this sort of thing was commonplace. Although my brother and I were quickly able to defend against the scare tactics of Forster & Garbus, I worried that other people had fallen for their scam, and paid allegedly overdue debt unnecessarily. A simple Google search answered a lot of my questions.
It seems that I was not the only person to be incessantly harassed by Forster & Garbus. Indeed, they have abysmal reviews on websites related to the Better Business Bureau and Consumer Affairs. Comments on these sites were submitted by people with a wide variety of backgrounds, and many commenters had stories of old debt being pursued even though these loans had been paid off. While many people underwent expensive legal processes to fight Forster & Garbus, others quickly paid (perhaps needlessly) the amount supposedly owed in order to prevent issues with their credit. Given these unfortunate stories, it is not surprising to learn that there have been class action lawsuits brought against the firm.
There are a few lessons to learn from my experience. For one, keep records of everything! As student loan borrowers, we are already under significant financial burdens just to keep our loans in good standing. Do not let scammers take advantage of this vulnerability. The other lesson, therefore, is to always fight back! While my Google search revealed plenty of stories regarding the pitfalls of dealing with Forster & Garbus, there were also just as many success stories, as well as links to resources that can be used to fight this firm. Although fighting off scammers may cost some money and time, it will help save your credit and prevent you from unnecessarily spending money on debt you already repaid.
Adam Rothman is a guest writer for Student Debt Diaries and is currently a medical professional in the New York City area. He is a brother of Jordan Rothman, the founder of Student Debt Diaries. You can reach Adam through email at adam@studentdebtdiaries.com