ECMC still owns this company
In January 2015, in United States District Court, Southern District of California, a judge issued an Order in a case alleging Premiere Credit of North America had violated state and federal FDCPA provisions. In this case, PCNA was identified as “an accounts receivable contractor authorized to perform collection activities on defaulted student loans on behalf of” Educational Credit Management Corporation (ECMC), a loan guarantor providing “services to the United States Department of Education (ED).” Specifically, in December 1983, a federal student loan was issued to someone identified as the plaintiff. The loan became delinquent, and in October 1985, a final notice was sent to the plaintiff. When the delinquency lapsed into default, the loan was transferred to the California Student Aid Commission (CSAC), and in April 1991, CSAC obtained a judgment on the loan. In September 2009, the loan was transferred to ECMC, who “initiated administrative wage garnishment actions against” the plaintiff. In March 2012, PCNA sent a notice of wage garnishment to the plaintiff. In April 2012, the plaintiff sent Premier Credit of North America an unsigned letter requesting a hearing and stating that he objected to the wage garnishment on the grounds that it “would be an extreme financial hardship” and “that he did not owe the debt.” At a September 2012 hearing, ED issued a decision regarding the garnishment, “finding that he had presented insufficient evidence to prove that he did not owe the debt,” and in October 2012, informed the plaintiff that they would continue collection activity. At the January 2015 hearing, the plaintiff alleged “that he was the victim of identity theft and that he did not take out the loan at issue,” and that as a result, Premier Credit of North America had violated federal and state FDCPA laws by “collecting on a debt that the plaintiff did not owe…and…making false representations, including that the plaintiff owed the debt.”
Premiere Credit of North America argued that the FDCPA did not apply in this case because “either: (1) the Higher Education Act (‘HEA’) statutory provisions bar the application of the FDCPA statutory provisions alleged by the plaintiff, or (2) HEA regulations bar the application of the FDCPA statutory provisions alleged by the plaintiff.” The court agreed that because PCNA was acting as a representative of a guarantor for federal student loans that, unlike many consumer debt collection disputes, the HEA may have jurisdiction with regard to legal questions regarding loan servicing. However, the court rejected PCNA’s argument that the HEA pre-empted the FDCPA, indicating that the laws were not in conflict, and that regardless, even if the HEA may allow certain leeway with regard to wage garnishment, it could not be interpreted as a means of obstructing the protections under the FDCPA. The court did agree that HEA may pre-empt state collection regulatory laws, but the plaintiff voluntarily retracted his state FDCPA claim, rendering the point moot. Thus, the court rejected Premier Credit of North America’s motion for summary judgment on the basis of the inapplicability of the FDCPA; however, the remaining issue of whether the plaintiff took out the loan or was the victim of identity theft was left unaddressed, allowing the complaint to continue to further proceedings.