In higher education related areas we currently have a system where a collection agency can make monetary demands accompanied with threats and also promises to provide debt validation in the process. However, when debt validation is requested the collection agency can send irrelevant material or not respond at all and state that the company no longer works on the particular account. So, the student loan collection agencies are allowed to hit and run and move on to the next set of accounts without being held responsible for the debt validation promise that they made.
That’s not right. When the collection agency that makes monetary demands is unable to validate that the demands are based on actual lending and borrowing transactions, the collection agency should be required to state so. In this particular case, such a statement would help to move the underlying dispute forward toward finding a conclusion to it.
Below is a copy of the complaint that I filed with Oregon Attorney General’s office.
Honorable Ellen F. Rosenblum
Oregon Department of Justice
1162 Court Street NE
Salem, OR 97301-4096
Dear Attorney General Rosenblum,
This is a complaint against Action Financial Services, LLC (1) false advertising, (2) breach of contract, (3) hit and run operations and (4) usage of false documents for the purpose of potential monetary gain. (Company's address is: 4894 N Runway Dr. Suite 103, Central Point, OR 97502.) Please note that this letter is part of a process that is being documented on StopExtortion.org.
I received a student loan collection letter from Action Financial Services, LLC dated 06/28/2016. The letter lists monetary demands and states the following:
Further, the same letter also states what Action Financial Services, LLC fees are regarding this case. Thus, with this letter Action Financial Services, LLC promises to provide financial services in the form of debt validation.
In a letter dated 07/25/2016 I requested debt validation. Action Financial Services, LLC received this debt validation request on 07/27/2016 (USPS Delivery Confirmation EL292335652US). Thus, we had a contract in place.
Based on the available information, the alleged loans simply do not exist. So, my debt validation request focused on whether or not any debt obligation actually exists: request for validation that the underlying alleged lending and borrowing transactions actually took place, that I actually received the allegedly borrowed money either directly, or indirectly as tuition support, and that the corresponding legally binding valid debt instruments exist.
I did not receive the requested debt validation from Action Financial Services, LLC. I communicated to the company that debt validation has not been provided with a letter dated 09/12/2016. Thereafter I did not hear from this company for a while.
However, with a letter dated 04/08/2017 Action Financial Services, LLC repeated its monetary demands that were accompanied with threats.
I repeated the debt validation request with a letter dated 05/01/2017. Action Financial Services, LLC received this debt validation request on 05/03/2017 (USPS Delivery Confirmation EL592799194US).
I asked to furnish the requested information by 06/01/2017 but have not received the requested response from Action Financial Services, LLC.
Thus, Action Financial Services, LLC:
In order to address the relevant problems, I filed a complaint with Better Business Bureau Northwest on 06/26/2017.
Action Financial Services, LLC responded to Better Business Bureau and the complaint first by stating that the company cannot respond due to privacy laws and wanted Better Business Bureau to close the case on these grounds.
I thereafter sent to Better Business Bureau a signed document stating that I waive all the relevant constraints.
Action Financial Services, LLC then responded by stating that the company has already fulfilled its obligations by mailing me copies of promissory notes.
This statement is false. Accordingly, in my response to Better Business Bureau I stated that I have not received any copies of promissory notes. Instead of legally binding promissory note documents, Action Financial Services, LLC has provided partial copies of financial aid applications that I filled in and signed as a student between 1990 and 1996.
Obviously, partial copies of financial aid applications and legally binding promissory notes are different documents. Further, validating that I have applied for financial aid as a student does not in any way validate that I received and owe bank loans. Action Financial Services, LLC employees should know all of this.
Apparently, Action Financial Services, LLC declined to provide any additional response to Better Business Bureau. Better Business Bureau closed the case on 08/03/2017. Better Business Bureau representative was very helpful but, of course, there is only so much that Better Business Bureau can do.
Please note that Action Financial Services, LLC response that the company has provided copies of promissory notes indicates that the company is using false documents for the purpose of potential monetary gain.
As is stated above, Action Financial Services, LLC sent me partial copies of financial aid applications, but is claiming that the company has sent me copies of legally binding promissory notes. The financial aid applications that I filled in and signed are approximately half a page long and do end with a short section that is labeled Promissory Note. Below that section is the only place on the application for a signature and that is where I signed my financial aid applications as a student. Based on these financial aid applications I received Rhode Island College Honors Scholarship, Pell Grant and work-study financial aid that covered the cost of my attending Rhode Island College 1990-1996.
My signing the financial aid applications below the section that is labeled Promissory Note does not in any way make me a borrower. A bank actually lending money to me and my accepting the loan would make me a borrower. In that case, the relevant documents and records would demonstrate that lending and borrowing took place.
According to the information received, the alleged student loan lender was Fleet Bank, a commercial entity that is subject to Uniform Commercial Code (UCC) requirements. As I have found out through my research, actual legally binding promissory note documents must contain the following information in order to meet the UCC requirements:
The financial aid applications that I signed do not contain any such information, because these are merely financial aid applications. No lending and borrowing transactions took place. Without lending and borrowing transactions relevant documents and information do not exist and no valid debt obligation exists either.
Another UCC requirement is that a legally binding promissory note must be an unconditional promise to pay. The financial aid applications that I signed fail this requirement as well, because they do not state with certainty that the financial aid applicant will receive or has received any loan amount at all. Similarly, the financial aid applications that I signed do not in any way demonstrate that I borrowed any money whatsoever.
Of course, Action Financial Services, LLC employees who handle debt validation requests must know what legally binding promissory note documents are. Thus, I have to conclude that by peddling partial copies of financial aid applications as legally binding promissory note documents, Action Financial Services, LLC employees were deliberately inaccurate and deceptive for the purpose of potential monetary gain.
Purposeful usage of false documents does not help to resolve this case. Instead, we should determine whether or not any debt obligation actually exists by using relevant information. Wishful thinking does not help us to find suitable conclusions. Action Financial Services, LLC and its business partners may wish that the loans existed, because their internal records, that they created, indicate so. That wishful thinking does not turn internal records into actual loans.
The available information demonstrates that the alleged loans do not exist. No lending and borrowing transactions and corresponding documents exist. The alleged loan principal is about 20 times higher than was the cost of the relevant average annual tuition. I did not live on campus. No explanation has been provided, where the allegedly borrowed money went to. Further, all the "proof" that the loans exist was generated after I graduated from college and by third parties, first by guaranty agency and then by Department of Education as "internal records."
So, what kinds of loans are these, where the principal balance is over 20 times higher than annual tuition, no lending and borrowing transactions exist, no records exist that as a student I received the alleged loans either directly or indirectly, as tuition support, and for which the "proof" was created by third parties after I graduated from college?
Of course, such alleged debt must be validated, just like Action Financial Services, LLC promised to do in writing. As I have requested before, Action Financial Services, LLC must validate that the underlying alleged lending and borrowing transactions actually took place, that I actually received the allegedly borrowed money either directly, or indirectly as tuition support, and that the corresponding legally binding valid debt instruments exist.
An important aspect is that if I received any bank loans as a student, then that must have taken place before I graduated from college in 1996. Thus, Action Financial Services, LLC should not send me documents and computer records that were generated by third parties after I graduated in 1996 as “proof” on lending and borrowing transactions that allegedly took place before I graduated in 1996.
In its response to Better Business Bureau Action Financial Services, LLC also stated that it has put my account under "cease and desist" status. However, this does not move the case further toward finding a suitable conclusion to it. Action Financial Services, LLC can put any account in any status they want. That is their internal matter. Similarly, any other third party can create any internal records they want, unless doing so is illegal. However, creating internal records does not give anybody the right to knowingly make unvalidated monetary demands that are accompanied with threats.
Similarly, in its response Action Financial Services, LLC also stated that the Department of Education has not changed its position. This is not relevant to my request. We are addressing Action Financial Services, LLC behavior. We are not addressing the behavior of the Department of Education. However, for the record, in accordance with case law, (citing)
The above citation is applicable to the time period when the alleged loans were made. Thus, the Department of Education as Action Financial Services, LLC business partner is in the shoes of the alleged lender, Fleet Bank, a commercial entity. Of course, the Department of Education is in a peculiar situation here, because no loans exist. So, the Department of Education could claim that the above case law does not apply to it because no loans exist. However, then the aspect that there is no valid base for making any monetary demands would become even more obvious.
In summary, at this point I expect Action Financial Services, LLC either to furnish the requested debt validation by using documents that (1) are in accordance with the relevant requirements, such as Uniform Commercial Code requirements for promissory notes and (2) were generated before I graduated from college in 1996, or clearly and explicitly state that it cannot validate the alleged debt. In addition, an apology is in order.
I would not consider a response such as “we no longer work on this case” by Action Financial Services, LLC in lieu of the requested debt validation related statements to be an acceptable solution. In my opinion such a response would provide additional proof that the company considers it to be acceptable to ignore its contractual obligations, to perform hit and run type of operations, to knowingly make unvalidated monetary demands and to use false documents in the debt validation process for the purpose of potential monetary gain.
Further, please note that I am filing this complaint because I do not have any better alternative available to me. In my letter to Action Financial Services, LLC I stated that if the company wants to participate in finding a constructive solution to this case, please send a constructive written proposal for doing so, starting with acknowledging the realities of this case. Action Financial Services, LLC has failed to send me any such constructive written proposal for resolving this case. Thus, I have to pursue this case, because if I don’t, I am giving companies like Action Financial Services, LLC green light to repeat their unethical actions. For the same reason, I hope that you will support this complaint. Let’s not allow companies to operate in a manner that is clearly unethical and may be illegal as well.
Please investigate this case. Further, please inform me which other agencies and organizations supervise matters related to financial services, false advertising, breach of contract, hit and run type of operations and usage of false documents for the purpose of potential monetary gain. As needed, I intend to file complaints with other such agencies and organizations as well regarding this case.