Student Debt Collection Businesses Face Looming Lawsuits and Shortfalls—Colleen Murphy in Business First
Goldberg Segalla’s Colleen M. Murphy, part of the firm’s Management and Professional Liability practice, spoke with Buffalo Business First about the unique legal risks that the COVID-19 pandemic and recent rule-changes pose to the student debt collection industry, and outlined recommended practices that businesses can implement for protection.
“We don’t know exactly where the lawsuits will come from for student loan collectors arising out of COVID-19, but we do know that, when you’re changing the rules and regulations, there’s always opportunity for a mistake to be made,” Colleen told Business First.
Aside from budget shortfalls due to missed debt payments, debt collection businesses could also face professional liability claims and lawsuits—including class actions—brought under the Fair Debt Collection Practices Act (FDCPA). Among other things, Colleen explained, debt collectors must be careful of when they begin to contact debtors to apprise or remind them of upcoming required payments.
“We’re reminding them to take this time to get ahead of the game,” Colleen said. “I’ve talked to some of the people in the businesses. Some of them are small businesses, too, and in some ways are just like everybody else.”
Colleen, and other members of the firm’s Management and Professional Liability practice prepared a tip sheet for student debt collectors navigating the COVID-19 pandemic.
Click to download: Student Debt Collection in the COVID-19 Environment: Avoiding and Mitigating Professional Liability E&O and FDCPA Claims
Read the article:
- “Student Debt Collection Businesses Face Looming Shortfalls,” Buffalo Business First, May 12, 2020
Goldberg Segalla’s Management and Professional Liability practice is home to a dedicated Student Loan Debt Collection E&O Defense Team, focused on handling and defending E&O cases brought against student loan debt collectors, including class actions brought under the Fair Debt Collection Practices Act (FDCPA). Contact Colleen M. Murphy to learn more.