<p>And just maybe handing over eft information to companies which have been routinely investigated for questionable practices is less than prudent. From the Boston Globe…</p>
<p>Sallie Mae called out once again
Officials claim lender’s collection unit uses heavy-handed tactics</p>
<p>By Ross Kerber, Globe Staff | May 13, 2007</p>
<p>A computer mix-up mistakenly showed she owed a $1,040 credit card debt, and for nine months a collections company allegedly harassed the Florida homemaker with automated voice messages or rude telephone representatives who demanded she pay up. One threatened to call her at all hours of the night.</p>
<p>“It was such a shock to get these phone calls,” says Craig. “It puts this pall over your life.”</p>
<p>The calls, it turned out, came from a division of SLM Corp. – better known as Sallie Mae, the student lending giant now under scrutiny over its dealings with college administrators and how it markets loans.</p>
<p>But documents also show Sallie Mae faces questions over what critics say are its heavy-handed tactics to collect debts for student loans and for broader consumer lending.</p>
<p>Sallie Mae says some of the complaints are old, that it has put new policies in place to prevent abuses, and that their numbers aren’t significant compared with the millions of transactions it conducts smoothly. The aggressive collection comes from a little-known unit that generated $157 million in profit on $636 million in revenue in 2006, one reason a group of private-equity investors and banks agreed to purchase Sallie Mae for $25 billion last month.</p>
<p>However, the collections work has also made Sallie Mae the target of several inquiries from officials concerned its practices amount to bullying. In a letter to Sallie Mae’s chief executive on April 26, for instance, Senator Edward M. Kennedy, Democrat of Massachusetts, wrote that he was concerned the company and other lenders “may be engaging in harsh and inappropriate tactics” against borrowers.</p>
<p>Kennedy spokeswoman Melissa Wagoner said the note was prompted by complaints from current and former students that collections agents used profane language, attempted to collect debts that didn’t exist, or harassed neighbors or co-workers.</p>
<p>Sallie Mae’s practices have also drawn the attention of Illinois Attorney General Lisa Madigan, who filed a suit in January against Arrow Financial Services LLC of Illinois – which is part of SLM’s debt management operations unit.</p>
<p>In the suit, filed in Cook County Circuit Court, Madigan claims Arrow “engages in a variety of abusive practices in its contacts with consumers,” citing 669 complaints filed with her office. In Massachusetts, a spokeswoman for Attorney General Martha Coakley said her office has received 32 complaints about Arrow.</p>
<p>Deborah Hagan, chief of Madigan’s division of consumer protection, said her office is in settlement talks with Arrow and Sallie Mae.</p>
<p>Sallie Mae spokesman Tom Joyce said the talks have been “productive” and said the total number of complaints represents just a small part of the 23 million accounts the company oversees. Speaking of Arrow, Joyce said, "We hold our employees there and across SLM to a high standard of compliance. We are confident of the scope and depth of our programs."Continued…</p>