Loan servicing company did not violate TCPA in trying to collect college class payments

By Nicholas Malfitano | Apr 27, 2017

HARRISBURG – A federal judge has decided that a loan servicing company did not violate the Telephone Consumer Protection Act (TCPA) in its attempt to collect on an education loan-related debt from one of its customers.

U.S. District Court Judge Christopher C. Conner ruled on March 13 to grant a motion for summary judgment to defendant Navient Solutions, LLC, which dismissed the case initiated by Crystal Stauffer that claimed the company had violated federal law.

In 2010 and 2014, Stauffer applied for federal student loans to cover the costs of her education at Everest College and Ashford University, respectively. On both occasions, she executed a master promissory note to obtain the loans. In the process, she authorized the school, the Department of Education (Department), or their respective agents to contact her regarding the loans “at the current or any future number that she provides for her cellular telephone or other wireless device using automated telephone dialing equipment.”

Stauffer respectively provided telephone numbers ending in “5039” and “3005” for these loan requests.

In between these loan applications, Stauffer further executed an unemployment deferment request on Feb. 26, 2012, and again authorized the Department, her school, her lender, and any guarantor to contact her about the loans at “any future number”. Stauffer provided a telephone number ending in “1687” in connection with her request.

Navient has serviced both of Stauffer’s federal student loans according to a contract with the Department of Education since May 2013, and Navient services loans at the account level rather than by individual loan; it uses any telephone number provided by the debtor as a contact number for all loans on the debtor’s account.

Conner stated when Stauffer approved the promissory note in 2010, she consented to release her phone number to the Department and authorized it to contact her at “any future number” provided with respect to her student loan debt, which ended up being the “3005” number.

Navient first called the “3005” number on Feb. 14, 2014 and during this call, Stauffer requested a student loan deferment. As such, Navient did not call the “3005” number again for more than one year.

Starting in February 2015, Navient tried to contact Stauffer concerning past-due payments for the 2010 Everest loans. Between Feb. 19, 2015 and May 26, 2015, Navient called the “3005” number 81 times and Stauffer answered only one of the 81 calls.

On May 26, 2015, Stauffer spoke with a Navient representative and advised that Navient had dialed an incorrect number, but did not tell Navient to stop calling the “3005” number. However, Navient did not call the “3005” number after May 26, 2015.

Stauffer filed a lawsuit on Aug. 7, 2015, followed by an amended complaint on May 27, 2016 – both of which alleged Navient violated the TCPA. Stauffer claims she did not consent to calls at the “3005” number concerning the loans issued in 2010, and in response, Navient filed the pending motion for summary judgment on July 29, 2016.

Conner said the U.S. Congress enacted the TCPA in 1991 for purposes of protecting consumers from “unwanted and intrusive calls”, but instituting a balance between “individual privacy rights” and “freedom of commercial speech.”

“The Act proscribes four principal practices…the Act forbids placement of ‘any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system…to any telephone number assigned to a…cellular telephone service,” Conner explained, with the caveat that the Act does not mention “prior express consent.”

A 1992 rulemaking session resulted in a rule that “a business may lawfully place autodialed calls to “persons who knowingly release their phone numbers thereto”, while a 2003 amended rule said “it is unlawful to make any call using an automatic telephone dialing system…to any wireless telephone number.”

However, in 2008, a clarification was made to exempt “creditors and collectors…calling wireless telephone numbers to recover payments for goods and services received by consumers” who had obtained “prior express content” from the called party, from this prohibition.

Conner explained the U.S. Court of Appeals for the Sixth Circuit had previously determined that “debtors who knowingly provide a telephone number in connection with the creditor-debtor relationship have consented to be called.”

“The record on this point is unequivocal: Stauffer invited the Department – and Navient as its agent – to contact her at the ‘3005’ number in connection with her student loan debt and their ‘normal business’ relationship. No reasonable juror could determine otherwise. Hence, Navient is entitled to summary judgment on Stauffer’s Telephone Consumer Protection Act claim,” Conner said.

The plaintiff is represented by Craig T. Kimmel of Kimmel & Silverman, in Ambler.

The defendant is represented by Eric M. Hurwitz and Michelle H. Badolato of Stradley Ronon Stevens & Young, in Cherry Hill, N.J.

U.S. District Court for the Middle District of Pennsylvania case 1:15-cv-01542

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at

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