If you have defaulted on your federal student loan, then, chances are that you have received a call from Coast Professional.
Coast Professional Inc., or CPI as they are commonly referred to, is a third party collections agency that is located in Geneseo, New York.
It is a top-performing Collection Company that focusses on government and higher education debt which includes federal and non-federal student loans, tuition, fees, accounts receivables, housing charges, and almost any other student debt.
They currently provide collection services to more than 200 government institutions, universities, and colleges in the US, and are a top vendor for the US Department of Education.
The purpose of this blog post is to share with you precisely who Coast Professional company are, what they do, how they collect debts, and also give you some insight into how you can exercise your rights as a consumer without being exploited.
Let us begin:
Who is a debt collector?
A debt collector is someone who works in a debt collection company. This is a company that operates as agents for creditors, in order to collect debts on their behalf at a fee, or sometimes a percentage of the amount collected.
Some debt collectors buy the debts they have been asked to collect from the creditors at a small fee, and then they turn a profit once the debt has been paid.
The debt collection process is not usually a very good one, and you may end up spending most of your time calling clients and arguing with them as you beg them to pay their debts.
Some of these calls end up very aggressive towards the clients, and debt collectors will sometimes find themselves on the wrong side of the law after dealing with a client in the wrong way, a way that violates their rights.
Debt collections companies usually are regulated by the FDCPS or the Fair Debt Collection and Practices Act, which is a law that was passed by parliament to ensure that consumers are protected against unscrupulous debt collectors.
How does Coast Professional operate?
Coast professional will usually take over debts from creditors, and once they have ownership of these debts, they will start hounding you with calls, emails, and letters to request you to pay them the student loan that you took and haven’t repaid yet.
They also go a step further and report you to credit bureaus, so the information on defaulting can be registered on your credit report. This will negatively affect your credit score.
They have also been known to increase the total balance that you owe, by charging you astronomical rates of interest in the form of collection fee for the work they have done.
This will essentially increase the total debt that you owe.
This is, however, part of the collection process, and they believe that the more pressure they put on you, the more chances they have of you paying them back.
If you are not in a position to pay the debt, there are usually two options for you. One is that they can resell the debt to yet another debt collection company, or they will sue you for the debt.
How many complaints have been made against Coast Professional?
This company is listed with the BBB, and so far, since they were listed, the BBB has received at least 7 complaints against them, which they have already closed.
These cases had to do with complaints about billing and collections.
Does it help to pay off the debt?
Well, you would think that it wouldn’t right?
Paying off a debt that is already in collections will not help you in any way. What will happen is that the debt will move from an unpaid collections debt to a paid collections debt, but it will not move from your credit report.
As long as there is a collections debt in your report, your credit score will still be negatively affected, which means that it won’t really help matters by paying it quick.
There is a repayment procedure that you are required to follow, and in addition, there is yet another procedure that you shall follow when you finish paying off the debt, so the entry can be deleted from your credit report.
If this entry is not deleted, you cannot have your credit score improved. This is the only way.
So, once you are contacted, don’t be quick to send them money. Take time to follow the laid out procedures so you can ensure that you do not only pay back the loan but also have it completely removed from your credit report.
So, this is the first step toward clearing your name with the bureaus. Verify or confirm that the debt really does belong to you.
Receiving that ill-fated call from Coast Professional will definitely cause you to worry about what you should do, and if you are in a better place in life, you may be tempted to just send them the money and get it over with.
But do not do this.
Take time and send them a letter for verification of the debt.
This is your right. It has been given to you by the FDCPA.
This process is called the debt validation process, and the debt collector is required to send you all of the documentation that pertains to the said debt. This should include when the debt was taken, how long you had paid the debt before you defaulted, and how much is remaining on the debt.
Once you receive this information, it should be proof enough that you owe the debt.
Age of the debt
There is something called “statute of limitations” this is governed differently by each state.
The statute of limitations is the length of time, within which a debt is liable, after that time, you are no longer required to repay the debt.
Now, the standard is seven years.
This means that if a debt is seven years old, then it is no longer required to be repaid, and in addition, the bureaus are required to delete it from your credit report.
Paying the debt
Once they validate the debt, then you will need to enter into vigorous negotiations for the repayment. Most customers who are aggressive enough have actually ended up paying up to 15% less than the original debt.
If you are a good negotiator, you can go ahead and do this on your own. However, if you are not very good at negotiating, then it is advisable that you involve a lawyer or a dispute resolution company to help you with this.
Remember that at the end of the day, the debt collectors only want you to show cause that you shall pay the debt, and in most cases, they are often more than willing to accommodate you.
They will even agree to a specified repayment plan if you show them that you are probably struggling financially.
Here are some blog posts I have written before on this topic.
This is a new process people have been talking about online, where you tell debt collectors to delete the debt from your credit report and that you shall pay them after.
Most consumers are being conned through this process, and therefore you should be careful not to fall for cons.
Here’s the thing, the only person who can remove a debt from your credit report is the credit bureaus, under instructions from your creditor.
If this hasn’t happened yet, then there is little chance that they shall remove the debt for you.
Follow the right procedures to avoid being conned.
What are your rights?
Many consumers are harassed on the phone by debt collectors because they do not understand their rights.
Under the FDCPA you have rights, and these rights protect you from debt collectors who are not keen on following rules.
Here are some of them;
Debt collectors are not allowed to use unfair tactics or any harmful procedures to try and collect from you.
They should never contact anyone who is not the owner of the debt on your behalf.
They shouldn’t threaten to use force.
They shouldn’t use coarse or abusive language towards you.
They shouldn’t call you very early in the morning or late at night.
They must never call your employer, or your neighbor or your colleagues to talk about the debt
They should never threaten to arrest you.
Being a student and in debt is extremely common. A majority of Americans are still trying to pay up their student loans.
The government has now put some measures in place to try and collect the more than $1.5 trillion in student loans. This means that you are probably going to receive a call from a debt collector requesting you to start paying off your loan.
I have always advised students to try and start the repayment of their student loans as soon as they receive, them, and while still in school, because the loan will never go away until you pay it.
If you start early, you will make it easier for you to reduce the total amount of debt even before you graduate and get employment.
But, if you have been called already, the best thing to do after validating the debt is to start paying off the loan in small installments. This will go a long way in repairing your credit report and score, which will make it easy for you to make financial decisions.