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Borrower Beware: Equitable Acceptance Corporation

In August 2018, a class action complaint was filed against Equitable Acceptance Corp. in New York, expanding the slate of options available for borrowers who feel they’ve been harmed.
Loans, Student Loans

Equitable Acceptance partners with student “debt relief” companies, including some of the businesses we’ve placed on the NerdWallet Student Loan Watch List for illegal or questionable dealings.

You never have to pay for legitimate student loan help. It’s available for free through the U.S. Department of Education or your student loan servicer.

Equitable has financed the fees that dozens of companies have charged borrowers for “loan assistance,” document preparation and other services.

Borrowers say they thought they had struck a deal for loan help with one business, only to discover that they had taken on a new loan with Equitable in excess of $1,000. If monthly payments aren’t made, borrowers said, the delinquency is reported to credit bureaus. Equitable told NerdWallet that it requires borrowers to acknowledge that they know they are taking out a loan several times during the sign-up process.

I have a contract with Equitable. What can I do?

The New York Legal Assistance Group has filed a class action complaint against Equitable and several dozen other companies. The complaint alleges that the companies conspired to defraud student loan borrowers.

NYLAG has set up a hotline for affected borrowers to get more information: 212-659-6165

In an email, Equitable said the case had no merit and was “premised on inaccurate and horribly skewed perspectives.” The company said it plans to file a motion to dismiss the complaint, which has not yet been certified as a class action lawsuit.

The company also said it will listen to complaints from borrowers. Email or call 866-646-8659 to reach the company.

Some borrowers have said that Equitable has simply transferred their agreement back to the originating company and that they are still stuck with the loan. If that happens, it’s critical to keep making your monthly payments to avoid damage to your credit while you try to get the situation resolved. If Equitable or another company won’t let you out of your agreement, find a lawyer.

Your local bar association will have a list of pro bono lawyers or legal services in your area, or search the attorney directory of the National Association of Consumer Advocates.

Why we flagged this business

In June 2018, NerdWallet reported that Equitable was under investigation by the Federal Trade Commission and several state attorneys general after a rise in consumer complaints. Equitable and another company also have been sued by the Missouri Higher Education Loan Authority, or MOHELA, for allegedly conspiring to hijack a MOHELA customer’s accounts. Equitable denies the claim.

At the time of this posting, the Better Business Bureau gave the company an “F” rating, down from “D+” in 2017.

What about other ‘debt relief’ companies?

The FTC and the Consumer Financial Protection Bureau have been cracking down on “debt relief” companies that rip off student-loan holders. Such companies often charge borrowers to fill out free government applications, or pocket money paid to service loans. These scams can push borrowers into default on their student debt and harm their credit scores.

NerdWallet started its Student Loan Watch List in 2017 to flag the student-loan businesses hit by enforcement actions, court judgments or liens, or bad ratings from the Better Business Bureau.

Source: NerdWallet reporting