By Colleen Tressler
Consumer Education Specialist, FTC

If you’ve defaulted on a federal student loan, chances are you’ll hear from a debt collector.

Debt collectors must obey the law when trying to find people who owe money. One student loan debt collector — GC Services, LP — failed to follow the law, and the FTC is taking action against them.

The FTC alleges GC Services was overly aggressive in their efforts to find student loan debtors by:

  • Leaving phone messages that illegally disclosed information about a person’s debts to other people without the debtor’s permission.
  • Calling people multiple times after being told that the person who answered did not owe the debt, that they had called the wrong person, or that the person they wanted could not be reached there.
  • Falsely claiming the company would take steps to prevent its employees from making unlawful calls to third parties to find a debtor.

Under a settlement with the FTC, GC Services will pay a civil penalty of $700,000, stop violating the FTC Act and the Fair Debt Collections Practices Act, and maintain records — for at least three years — to show they’re in compliance.

It’s important to understand your rights if you’re ever contacted by debt collectors. They:

  • may not call you before 8 a.m. or after 9 p.m.
  • may not contact you at work if you’ve told them that your employer doesn’t allow you to get such calls in the workplace
  • may not contact a third party about you for any reason other than getting your contact information
  • may not harass or abuse you or anyone else they contact about you
  • may not lie about the amount you owe
  • may not use deceptive methods to collect a debt from you, including: falsely claim to be law enforcement officers; use a fake company name; claim that you’ll be arrested if you don’t pay your debt; or threaten to seize, garnish, attach, or sell your property or your wages — unless they are permitted by law to do it and intend to do so.

If you believe a collector has violated those rights, the FTC wants to hear about it.

If you’re having trouble paying your student loan, please read Student Loan Debt Relief.