Equitable Acceptance Corporation has a clever plan when student loan debt relief was being sold hot and heavy. They would take over the contracts owed for services and when the underlying debt relief company vanished or folded, the contracts were still due, even when the services delivered were haphazard at best.
“Equitable Acceptance Corporation (EAC) may have been able to pass off the unhappy consumers as a fluke but the complaint filed by the FTC says Equitable Acceptance intentionally sought out sellers of student loan assistance services and “vetted” them.
“Sometime in 2015, EAC hired Defendant Brad Hunt to locate and investigate other student debt relief companies with which EAC could do business. Hunt provided training and business materials to these companies regarding sales processes and proper disclosures and received a commission for each consumer that entered into an EAC Credit Plan.
In late 2015, EAC started entering into relationships with other student loan relief dealers, offering the EAC Credit Plan to their customers in the same fashion as it had been doing business with the Corporate Debt Relief Defendants throughout 2015. Hunt introduced several dealers to EAC.
By this time, EAC knew or should have known that the sales model that each of the dealers would follow was deceptive. EAC had already received consumer complaints regarding deceptive sales practices on the part of one or more of the Corporate Debt Relief Defendants. Despite these complaints, EAC relied on Hunt as the “industry expert” to vet and to train new dealers. Moreover, EAC failed to conduct an independent review of Hunt’s training or the new dealers’ sales practices.” – Source
While Equitable Acceptance agreed to not collect on some of those student loan debt relief financing agreements in the past in this case, it still left other consumers paying.
A class-action lawsuit was filed against Equitable Acceptance corporation and all their student loan debt relief dealers in 2018.
According to a previous court document
gov.uscourts.nysd.499519.178.0, the class of consumers covered by this lawsuit was “All individuals who obtained a Credit Plan from EAC to finance student loan assistance services.”
A note on this case states the proposed settlement order was accepted as submitted.
I am not an attorney but here is how I read the proposed Order Granting Final Approval of Class Settlement.
The order states, “The Court approves the Settlement Agreement as fair, reasonable, and
adequate, and finds that it is the result of intensive, arms-length negotiations between
experienced attorneys familiar with the legal and factual issues of this case.”
Consumers that had Equitable Acceptance contracts for student loan debt relief contracts should be contacted and eventually be issued some sort of small settlement check. These types of checks are typically a fraction of what consumers actually paid. But that’s not really the part of this lawsuit that is the most important.
What I Think Everyone Will Applaud
The proposed order states:
“Consistent with the Settlement Agreement, the Court hereby permanently:
a. Bars and enjoins EAC and Jeffrey Henn from pursuing any collections against Class Members on the Credit Plans.
b. Bars and enjoins EAC and Jeffrey Henn from selling, assigning, or transferring any Credit Plans or otherwise taken any action that would permit any party to claim a right to collect on any Credit Plan funded or originated by EAC.
c. Bars and enjoins EAC and Jeffrey Henn from acquiring, issuing, originating or financing new Credit Plans.
d. Orders that EAC shall fully cooperate in Class Counsel’s efforts to assist Class Members whose Credit Plans have been sold or assigned to Dealers or other entities, shall provide truthful and complete information upon Class Counsel’s reasonable notice, and shall designate an individual who is responsible for carrying out this cooperation, who shall be required to carry out such cooperation even in the event that EAC closes or ceases business operations.
So That’s It, They Are All Cancelled
It appears the class settlement kills the collection of any Equitable Acceptance Corporation credit plan for student loan debt relief assistance.
While the document below says the order is proposed, the court record states, ” ***NOTICE TO COURT REGARDING PROPOSED ORDER. Document No. 193 Proposed Order was reviewed and approved as to form.”
It appears that the chapter in debt relief is now closed. That is until the next time and until the next company swoops in claiming they have this brilliant idea that leaves a wake of unhappy debtors.