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Class Action Settlement with Financing Company that offered Sham “Student Debt Relief” to Federal Student Loan Borrowers

Williams c.Equitable Acceptance Corporation

This class action lawsuit challenged Equitable Acceptance Corporation (EAC) and its President Jeffrey Henn’s practice of financing sham “debt relief services,” including the false promise of student loan “forgiveness.”

The case claimed that EAC worked with more than 40 companies, called Dealers, to sell “debt relief services” to student loan borrowers. These companies did not tell the borrowers that all the services they provide are already available for free from the federal government. Instead, the companies charged borrowers about $1,300, told them they could pay with a “payment plan,” and sent borrowers to EAC, which gave them an entirely new loan in the form of a maxed-out line of credit—with sky-high 21% interest.

NYLAG worked with co-counsel Quinn Emanuel Urquhart & Sullivan, LLP to file this case on behalf of Vanessa Williams and Kory Turner, two student loan borrowers and a class of approximately 80,000 other borrowers who entered contracts with EAC. NYLAG and EAC have now reached a proposed settlement that will secure important benefits for the class. Under the settlement, EAC has agreed to stop collections, delete all credit reporting, and pay $1 million to fund damages to the class. Because EAC cannot collect any more money from Class Members and cannot sell any remaining balances to another company, thousands of borrowers across the country who were paying to EAC now do not have to choose between paying for essentials and paying EAC. This settlement is particularly favorable because EAC has almost run out of money, and it might be impossible to get any money from EAC later because EAC is winding down its business. The settlement does not affect class members’ obligation to pay their federal student loans. For more information about the case and terms of the settlement, please visit www.equitablesettlement.com.

If you are a federal student loan borrower who has worked with Equitable Acceptance Corporation, you should receive an official notice about the settlement by email at the email address on your Equitable account. If you received an official notice about the settlement and have any questions about the case or settlement, please visit www.equitablesettlement.com and contact the Class Settlement Administrator at 1-800-203-0592 ou EquitableSettlement@atticusadmin.com.

If you are a federal student loan borrower who has worked with Equitable Acceptance Corporation and did not receive a notice, or you do not know whether you are a Class Member, please visit www.equitablesettlement.com and contact the Class Settlement Administrator for more information at 1-800-203-0592 ou EquitableSettlement@atticusadmin.com.

If the settlement website and Class Settlement Administrator are unable to answer your question, please contact us at 212-659-6165 ou eaclawsuit@nylag.org. We are receiving a high call and e-mail volume, so we ask you to be patient while we work to return your calls or e-mails.

Plus d'information:

Nom: Williams c. Equitable Acceptance Corporation et al.

Dkt. #: 18 Civ. 7537 (SDNY 2018)

Juge: Hon. Naomi Buchwald

Coconseil: Quinn Emanuel Urquhart et Sullivan, LLP

Statut: Settlement reached.

Réclamations:

Violations of Racketeer Influenced and Corrupt Organizations Act (RICO), the Truth in Lending Act, Fraud, State Consumer Protection law, and Usury.

Points forts:

  • The Court granted preliminary approval to the settlement on April 27, 2020.
  • Parties reached a settlement in February 2021.
  • Les demandeurs ont déposé le Plainte in August 2018, and Amended Complaints in January 2019 et July 2020.
  • Plaintiffs successfully opposed both Defendants’ Motions to Dismiss the RICO claims.
  • After this suit was filed, multiple law enforcement agencies, including the Federal Trade Commission and the New York Attorney General, also sued Equitable Acceptance over similar practices.
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