Williams v. Equitable Acceptance Corporation et al. (2018)
No. 18 Civ. 7537 (S.D.N.Y.)
In August 2018, the Special Litigation Unit filed Williams v. Equitable Acceptance Corporation et al. on behalf of Vanessa Williams and Kory Turner, federal student loan borrowers. The class action lawsuit alleges that Equitable Acceptance Corporation (“EAC”) and more than 40 other companies engaged in a coordinated fraudulent scheme to sell scam debt relief services to tens of thousands of federal student loan borrowers.
The complaint, filed in the United States District Court for the Southern District of New York, alleges that EAC directed the dozens of companies it works with (“dealers”) to sell purported student loan assistance services to federal student loan borrowers for $1,300. Dealers solicit borrowers by cold-calling them and making a variety of misrepresentations, including that they will obtain “forgiveness” for borrowers. The Dealers do not tell borrowers that all the services they provide are already available for free through the federal government, or that the services provided often raise the borrowers’ interest rates, balances, repayment terms, or all of the above. The Dealers purport to offer the borrowers the option to pay the $1,300 fee through a “payment plan”—steering them to the second part of defendants’ fraudulent scheme. The “payment plan” offered by the Dealers is, in reality, an entirely new loan from EAC in the form of a maxed-out line of credit—with sky-high 21% interest. Despite hundreds of complaints with the Better Business Bureau and the Consumer Financial Protection Bureau, EAC and its dealers have continued their practices unabated.
Plaintiffs seek relief under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), the Truth in Lending Act (“TILA”), the Computer Fraud and Abuse Act (“CFAA”) and New York State law.
“Defendants’ victims are among the millions of vulnerable student loan borrowers already struggling to make ends meet,” said Danielle Tarantolo, Co-Director of NYLAG’s Special Litigation Unit. “Defendants’ coordinated scheme targets these individuals to sell them fraudulent services that push the borrowers into even greater debt while diverting their money into Defendants’ pockets.”
The complaint seeks compensatory damages and injunctive relief for the class of 60,000 student loan borrowers.
If you are a federal student loan borrower who has worked with Equitable Acceptance Corporation or its partner dealers and would like to speak with NYLAG, you can call our case hotline at 212-659-6165.
NYLAG Attorneys: Danielle Tarantolo, Jane Greengold Stevens, Jessica Ranucci
Co-Counsel: Quinn Emanuel Urquhart & Sullivan LLC