The two settlements, totaling nearly $ 4 million, will fund local consumer programs statewide. The two were negotiated by Attorney General Maura Healey’s office, which enforces consumer protection laws, including debt collection regulations.
The state’s debt collection regulations are among the strictest in the country, and the two colonies are among the largest of their kind.
In the most recent case, Transworld, based outside of Philadelphia, was accused of making excessive phone calls to debtors at their homes and places of work and failing to disclose to debtors in some cases that the debts they were trying to collect were too old to be legally collectible.
The attorney general’s office also alleged that Transworld filed false and misleading affidavits in prosecution of debtors. In some cases, those who signed the affidavits claimed to have personal knowledge of the facts of certain debts, when in fact they had no personal knowledge, according to the 17-page settlement document filed in Suffolk Superior Court. .
Further, Transworld, in some cases, has asserted in affidavits that certain debts were owed when the company “did not have sufficient documentation to establish the chain of title” for that debt, the settlement record says.
“This company has routinely violated state laws and regulations by harassing and misleading vulnerable and low-income consumers and student borrowers,” Healey said in a statement. “A top priority in my office is to protect the economic security of Massachusetts residents, and we will take action against companies that engage in illegal debt collection practices.
In a press release, Transworld noted on Tuesday that the company had not admitted the attorney general’s “findings or conclusions” and said the conduct in question occurred from 2014 to 2016.
“There will be no impact on day-to-day operations as the alleged conduct occurred over four years ago and does not reflect current practices,” Transworld said.
Transworld called the matter a “distraction” and said its resolution would allow the company to focus on providing its services.
Transworld is one of the country’s largest debt collectors and serves as the primary debt collector for private student loans held by NCT, which holds hundreds of thousands of student loans with a face value of around $ 12 billion. , according to the court record.
Attorney General’s Office has accused Transworld of violating state debt collection regulations which prohibit more than two calls per week to a consumer’s home and more than two calls per month to a consumer at work .
Transworld “frequently” attempted to collect debts from consumers who were so old the debt was “statute-barred,” meaning those debts were no longer legally enforceable through trial, the prosecutor’s office said. general. State debt collection regulations prohibit the collection of a prescribed debt unless the consumer receives notice that the debt is time-barred and a consumer cannot be required to pay the debt by the consumer. through legal action.
The terms of the settlement include assurances from Transworld that it will comply with state regulations.
The attorney general’s office reached a similar settlement in 2016 with Ditech Financial, a national mortgage manager that previously operated as GreenTree, according to an attorney general press release dated 2016.
Ditech agreed to pay the state $ 1.4 million for its alleged abusive debt collection practices, including excessive phone calls to borrowers and failure to inform them of their right to documentation of their debt, according to the Press release.