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Student borrowers sue over illegally damaged credit scores amid coronavirus pandemic.
Consumer advocates are suing federal student loan servicer Great Lakes and three credit reporting agencies over failure to stop reporting borrowers’ credit despite the federal government announcing that it would suspend credit reporting.
“During a national pandemic, these companies illegally damaged the credit of millions of people,” SBPC Executive Director Seth Frotman said in a statement. “For too long, the student loan system has crushed borrowers when they slip up, while the industry has received a free pass when it harms millions. Borrowers deserve justice.”
The class action suit was filed on Wednesday evening by the nonprofit law firm Towards Justice as well as the firm Berger Montague, with support from the Student Borrower Protection Center, against Great Lakes (NNI), Equifax (EFX), TransUnion (TRU), Experian (EXPN.L), and agencies owned by VantageScore Solutions in the U.S. District Court’s Northern District of California.
The suit accuses the companies of “inaccurately reporting information about student loan payments that were suspended under the CARES Act.” Consequently, “Plaintiffs and other Class members will suffer long lasting credit stigma, including inaccurate and lower credit scores resulting in no, limited or more costly access to credit.”
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