Consumer Financial Protection Bureau goes on the Offensive… Again.

Months after filing a complain against for-profit giant ITT, the customer Financial Protection Bureau (CFPB) has filed another lawsuit against another for-profit college, this time the Corinthian Colleges chain.? The allegations within this complaint demonstrate some of the many obstacles that student borrowers face.

The CFPB complaint alleges that Corinthian:

  • defined a “placement” just like any job that lasted one day, using the promise of another day;
  • paid employers to temporarily hire graduates from Corinthian schools;
  • falsified placement information;
  • aggressively recruited through persistent telemarketing;
  • subjected consumers who visited its campuses to high-pressure sales efforts;
  • referred internally to its students as having “inimal to nonexistent knowledge of basic financial concepts,” as well as poor or no credit rating.
  • career services included distributing job postings from Craigslist

Perhaps probably the most egregious part concerning the complaint against Corinthian is the alleged relationship with a company called Genesis loans.? Corinthian “marketed and promoted” these financing options, but told students these were “produced by a completely independent third-party entity” which Corinthian was without a “financial interest” within the loans.? In reality, Corinthian was purchasing many of these loans, and then taking aggressive action to collect your debt.? This aggressive action included: paying bonuses to personnel who collected on past-due debt, pulling students out of class, preventing students from subscribing to classes, and terminating computer access.

In short, the CFPB is accusing Corinthian of lying to obtain students to go to the college, lying about student loans, and then bullying the students to pay back the debt.

What does this all mean for you personally?

If you are or were a Corinthian University student, it’s great news.? The CFPB has prepared an in depth FAQ outlining your rights and responsibilities and just what you may expect out of this litigation.? As of right now, we’re in early stages of the legal process along with a complaint is just an allegation.? Corinthian won’t be obligated to pay for anything unless the CFPB has the capacity to prevail in the court or secure a settlement.? However, the filing of the complaint is a huge step forward, and it obviously means Corinthian has caught the attention from the authorities.

If you didn’t go to Corinthian, but think you had been the victim of similar activities, you definitely wish to file a complaint with the CFPB.? Filing a complaint using the CFPB directly benefits you since it forces your lender to reply to your specific accusations.? Additionally, it might help others just because a number of complaints could ultimately lead to the next CFPB investigation and lawsuit.