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Student loan borrowers wronged by the private lender Citibank will receive compensation which range from $47 to $250 and the return recently fees and overpayment for all those eligible. But you won’t determine if you?qualify until Citibank completes its repayment plans.
In late November, the Consumer Financial Protection Bureau ordered Citibank to compensate borrowers because, because it serviced loans, it charged erroneous late fees and interest; misled borrowers about minimums, leading to overpayment; didn’t provide required information to borrowers who were denied loan co-signer release; and misled borrowers?regarding their eligibility to receive a tax deduction?for interest payments.
In its order, the CFPB indicated just how much affected student loan borrowers could expect to receive:
- Borrowers who paid undue additional fees: total amount paid
- Borrowers impacted by prematurely capitalized interest: $47
- Borrowers with multiple student education loans who overpaid minimum payments: total amount of the overpayment
- Borrowers denied loan co-signer release: $250
- Borrowers who overlooked a student loan tax deduction: nothing, but borrowers can amend previous tax returns to assert the deduction
Citibank must pay borrowers as many as $3.75 million.?It will also pay a $2.75 million fine making changes to the servicing practices.
Until Citibank submits its redress plan there is no telling how many affected consumers is going to be eligible, according to Sam Gilford, a spokesperson for the CFPB. Citibank must submit the plan within 90 days of the order, and also the plan must be deemed complete before borrowers can?receive payment. Citibank will reach out to eligible borrowers.
Citibank stopped servicing its private student education loans earlier this year and transferred the majority of its portfolio to Firstmark Services. If a borrower’s loans continue to be serviced by Firstmark, he or she will receive the payment as an account credit. Borrowers who no longer possess a Firstmark account will get a check from Citibank or Firstmark.
This is the second amount of time in 2017 that the CFPB has had action against a student loan servicer. In January, the CFPB and multiple state attorneys general sued Navient, the largest servicer of federal student education loans. In 2015, the CFPB also took action against Discover for its private student lending practices.
If you’re having problems together with your loan servicer, submit a complaint towards the CFPB.