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GC Services Settles Student Loan Debt Collection Suit for $700,000

According to a Federal Trade Commission press release, GC Services has agreed to pay a $700,000 civil penalty to the FTC for allegedly revealing consumers’ student loan debt to third parties. The FTC noted that GC Services collects on defaulted U.S. Department of Education loans as well as other types of debt.

Under the stipulated order, which is expected to be approved by a U.S. District Court judge for the Southern District of Texas, GC Services is prohibited from violating the Fair Debt Collection Practices Act. The FTC had alleged that, in addition to disclosing student loan debt to third parties, GC Services had continued to call people who said they did not owe the debt in question, people who said that GC Services had called the wrong person, and people who said that the person GC Services was trying to reach could not be reached at that number.

The Federal Trade Commission typically undertakes enforcement actions against debt collection agencies that systemically violate the Fair Debt Collection Practices Act. Unfortunately, the government doesn’t have the resources to litigate FDCPA violations on behalf of individual consumers, which is why the law says that consumers and their attorneys can sue in federal court, and that the FDCPA violator has to pay consumers’ legal fees.

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