According to the Consumer Financial Protection Bureau's most recent annual report, the agency fielded 3,800 complaints about private student loan servicers between October 2012 and September 2013. Borrowers complained about a number of customer service issues including communication problems that led to costly errors -- like missed or mis-processed payments, which can affect a borrower's credit scores.
One Indianapolis woman who racked up about $138,000 in student loans for veterinary school encountered her first problem in October, when her loan was sold to a different servicer. Over five months, she experienced an accidental double payment, a missed payment, forbearance, and a large spike in monthly payments. She and her husband produced documentation of loan-payment activity to prove that errors in her account were not her fault.
The example demonstrates how borrowers must stand up for themselves and carefully keep track of debts and payments. They should pay attention to details and contact customer service as soon as they notice anything unusual or unexpected. They also should print and document everything, which may include printing payment receipts and timestamps for automatic payments, when available. Complaints or requests to servicers may need to be submitted in writing.
"If you have your documentation to show the payments you made or the notes of what was agreed to, that's going to go a long way to helping you fix the problem," says Gerri Detweiler, Credit.com's director of consumer education. "The other thing to keep in mind is if this mistake has damaged your credit, and they won’t fix it, you may have a basis from a credit damage lawsuit."