New York Consumer Claims Pioneer Credit Recovery Misrepresented His Student Loan Debt

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A New York consumer has filed a proposed class action against Pioneer Credit Recovery, Inc. after receiving a collection notice from the company that he says inaccurately stated that his student loan debt was accruing late charges.

According to the suit, the March 2018 letter sought to collect on a $70,200.14 obligation owed to New York Higher Education Service and read, in part (emphasis in complaint):

“As of the date of this letter, the balance shown is owed. Because interest may be required to be paid on the outstanding portion of the balance, as well as late charges and other charges that may vary from day to day, the amount required to pay the balance in full on the day payment is sent may be greater than the amount stated here.”

The suit alleges that the creditor was no longer assessing late charges on the account and never authorized the defendant to apply any fees to the balance. In sum, the case argues that the collection agency neglected to “adequately review its actions to ensure compliance” with the Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from misrepresenting the “character, amount or legal status of a debt.”