Sallie Mae Allegedly Violates Telephone Consumer Protection Act

Indiana Consumer Law Group/The Law Office of Robert E. Duff has recently filed a lawsuit against Sallie Mae, Inc. in the United States District Court for the Southern District of Indiana alleging that Sallie Mae violated the Telephone Consumer Protection Act (“TCPA”). Our client has alleged that he was a borrower/co-borrower and was obligated on student loan debt to Sallie Mae. Our client alleges in the Complaint that he did not provide Sallie Mae with his cellphone number at any time during the transaction that gave rise to debt or at any other time. Nevertheless, he alleges, Sallie Mae began calling his cellphone numerous times with an autodialer in an attempt to collect the debt, in violation of the TCPA (for more about what constitutes a TCPA violation, click here).

The TCPA provides for an award of damages of up to $500 per call and up to $1500 per call if the violation was knowing or willful. We believe we will be able to show that the calls in this case were knowing and willful because, among other reasons, our client expressly requested that Sallie Mae stop calling his cellphone yet the calls continued.

On February 2, 2010, a class action lawsuit was filed against Sallie Mae alleging that Sallie Mae violated the TCPA by placing collection calls to cellular telephones through the use of an automated dialing system and/or artificial or prerecorded voice without the prior express consent of the class members. That case is captioned Arthur, et al. v. Sallie Mae, Inc., Case No. C10-0198JLR, and was filed in federal court in Washington State. The class, i.e., the people that Sallie Mae allegedly did this to, numbers over 8,000,000. The case was settled on terms that appear to be pretty outrageous (bad for consumers). Despite the fact that a single call can be worth up to $1500, each class member who makes a claim is anticipated to receive $20.00 to $40.00 in cash or credit toward their indebtedness no matter how many calls they actually received. Meanwhile, the attorneys for the class have received an award of $4,830,000.00. Outcomes like this are what give attorneys a bad name.

The settlement was approved by the District Court, but has been appealed. Despite settling the case for over $24,000,000, Sallie Mae has denied that it did anything wrong. Sure.