Loan servicer agrees to pay $2.4M after AG investigation

Officials say the investigation began last December

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BOSTON (AP) — Officials say a national loan servicer has agreed to pay $2.4 million for allegedly failing to properly process federal student loan repayment plan applications and making “excessive phone calls to borrowers.”

Massachusetts Attorney General Maura Healey’s office said Monday the agreement follows an investigation into Xerox Education Services. Xerox, formerly known as ACS Education Services, offers private and federal loans.

Officials say the investigation began last December and found the company didn’t properly process student borrower applications, violated debt collection regulations and failed to investigate some credit reporting disputes.

Court documents say Xerox allegedly “charged some borrowers excessive late fees” and failed to protect some active-duty service members, which is required by federal law.

Healey’s office says Xerox “is implementing the enhancements to its loan servicing practices.”

 

Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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