Lawsuit against Transworld Systems Inc. related to student loan debt collection

Introduction — Student Loans — TransWorld Systems Inc

It is no secret that private student loans are a terrible problem — as are many of the bogus lawsuits filed by National Collegiate Trust.  Or sometimes called National Collegiate Student Loan Trust.

The company behind this — often pulling the shots — is an infamous company named Transworld Systems Inc.  They prepare the documents for the Trust collection cases and often manage the entire litigation as well as other collection activities.

In a recent suit, our client fought back against this company.

Our client was sued by National Collegiate Trust and beat them at trial.

That should have been the end of up but unfortunately, Transworld Systems Inc (TWI) decided to continue to collect against our client even though the judge said our client did not owe on this student loan.

We hope you enjoy reading these allegations and understand TWI will likely come in and deny everything.  They would disagree 100% with what we have alleged in this lawsuit.

That’s ok — that’s why they build the courthouses to try these cases.  🙂

Actual Text of the Complaint/Lawsuit Against Transworld Systems Inc

JURISDICTION AND VENUE

1. This action arises out of all Defendants’ violations of the Fair Debt Collection Practices Act (15 U.S.C. § 1692 et seq. [hereinafter “FDCPA”]) and state law.
2. Venue is proper as Plaintiff lives in Alabama and the Defendant does business in this judicial district.

PARTIES

3. Plaintiff is a natural person who is a resident of Alabama.
4. Defendant Transworld Systems Inc. (“Defendant” or “Transworld”) is a foreign debt collection firm that engages in the business of debt collection in this judicial district in Alabama. It is a “debt collector” under the FDCPA.
5. Defendant Transworld collects on defaulted consumer debt.
6. The primary and principal business of Defendant Transworld is to collect debts.
7. Defendant Transworld collects debts allegedly owed to other companies.
8. Defendant Transworld sends collection notices to consumers, makes collection calls to consumers, and credit reports on consumers.
9. Fictitious Defendants “A”, “B” and “C” thereby intending to refer to the legal entity, person, firm or corporation which was responsible for or conducted the wrongful acts alleged in the Complaint; names of the Fictitious parties are unknown to the Plaintiff at this time but will be added by amendment when ascertained.
10. Any reference to any Defendant refers to all Defendants and Fictitious Defendants.

RECOGNITION BY CONGRESS OF THE WIDESPREAD ABUSE BY COLLECTORS

11. Congress found it necessary to pass the FDCPA due to rampant abusive practices by dishonorable debt collectors.
12. Congress recognized that there are four social ills caused by abusive debt collection: (1) Unnecessary personal bankruptcies; (2) Marital instability; (3) Loss of jobs; and (4) Invasions of individual privacy.
13. Congress also found that it is fundamentally unfair for the abusive collection agencies to have an unfair competitive advantage over those honorable debt collectors that decide to obey the law and follow the rules.
14. 15 USC 1692 is entitled “Congressional findings and declaration of purpose” and it states as follows:

(a)        There is abundant evidence of the use of abusive, decep­tive, and unfair debt collection practices by many debt collectors. Abusive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy.

(b)       Existing laws and procedures for redressing these injuries are inadequate to protect consumers.

(c)        Means other than misrepresentation or other abusive debt collection practices are available for the effective collec­tion of debts.

(d)       Abusive debt collection practices are carried on to a sub­stantial extent in interstate commerce and through means and instrumentalities of such commerce. Even where abusive debt collection practices are purely intrastate in character, they nevertheless directly affect interstate com­merce.

(e)        It is the purpose of this title to eliminate abusive debt col­lection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt col­lection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.

[Emphasis added].

FACTUAL ALLEGATIONS

15. In 2015, National Collegiate Trust sued Plaintiff alleging that Plaintiff owed a student loan.
16. Plaintiff disputed this and the case was set for trial.
17. A judgment in favor of Plaintiff  (and against National Collegiate Trust) was entered on December 1, 2015.
18. Plaintiff owed no student loan debt to National Collegiate Trust.
19. Despite this fact, which was judicially established with the victory by Plaintiff over National Collegiate Trust, Defendant Transworld decided to collect against Plaintiff.
20. On the same bogus debt that Plaintiff was sued on.
21. Sued on and that Plaintiff won back in December 2015.
22. This includes letters, calls, credit reporting, and other collection activity against Plaintiff by Defendant Transworld.
23. One example of the collection activities involved a letter dated January 10, 2017, that was mailed to Plaintiff by Defendant Transworld.
24. It is clear that Defendant Transworld will continue to collect on this bogus debt and will continue to violate federal and state law.
25. This lawsuit is brought to recover damages and to ensure that Defendant Transworld will no longer bother, harass, and collect against Plaintiff.
26. The conduct of the Defendants has proximately caused Plaintiff past and future monetary loss, past and future damage to Plaintiff’s creditworthiness, ability to apply for and receive credit, past and future mental distress and emotional anguish, and other damages that will be presented to the trier of fact.
27. All actions taken by Defendant Transworld were done with malice, were done willfully, and were done with either the desire to harm Plaintiff and/or with the knowledge that the actions would very likely harm Plaintiff and/or that the actions were taken in violation of the FDCPA and state law and/or that Defendant Transworld knew or should have known that the actions were in reckless disregard of the FDCPA and state law.
28. Defendant Transworld has engaged in a pattern and practice of wrongful and unlawful behavior with respect to collection activities and therefore Defendant Transworld is subject to punitive damages and statutory damages and all other appropriate measures to punish and deter similar future conduct by Defendant Transworld and similar companies.
29. Defendant Transworld is liable to Plaintiff through the doctrine of Respondeat Superior for the wrongful, intentional and negligent acts, errors, and omissions done in violation of state and federal law by its employees and agents.
30. Plaintiff has suffered actual damages as a result of these illegal actions by Defendants in the form of anger, anxiety, emotional distress, fear, frustration, upset, humiliation, embarrassment, amongst other negative emotions, as well as suffering from unjustified and abusive invasions of personal privacy.
31. All actions taken by employees, agents, servants, or representatives of any type for Defendant Transworld were taken in the line and scope of such individuals’ employment, agency or representation.
32. At no time has Defendant Transworld told or implied to Plaintiff that any conduct by any agent or employee of Defendant Transworld was outside the line and scope of such employment or agency.

Additional Factual Allegations Against Defendant Transworld

33. Defendant Transworld has continued to collect against Plaintiff when Plaintiff did not owe any money to Defendant Transworld on this account, which violates the alleged agreement creating this debt as the agreement does not allow for collecting a debt that is zero from anyone, including Plaintiff.
34. Defendant Transworld has misrepresented the debt as being owed, when it was not owed.
35. Defendant Transworld has misrepresented the debt, including the legal status of the debt, as none was owed during the time that Defendant Transworld has been collecting on the debt.
36. Defendant Transworld has taken action it knows is illegal including false credit reporting/credit inquiries.
37. Until discovery is conducted, it is unknown regarding the details of all of Defendant Transworld’s collection activities including calls, letters, third party contacts, etc. All actions of Defendant Transworld related to Plaintiff have been in violation of state and federal law and Plaintiff claims all damages allowable under the law.
38. Defendant Transworld knew that by its conduct described in this Complaint that the natural consequence – the desired consequence – would be that Plaintiff would be harassed, oppressed, and abused by the collection activities and by all other wrongful acts described in this Complaint.
39. The debt being collected is a consumer debt as defined by the FDCPA.
40. Plaintiff is a “consumer” as defined by the FDCPA.
41. Defendant Transworld is a “debt collector” as defined by the FDCPA as when it allegedly received the supposed debt owed by Plaintiff, the alleged debt was in default and the collecting of defaulted debt is a major part of the business of Defendant Transworld.
42. Defendant Transworld has full knowledge of what it is doing by its wrongful collection activities including illegal credit reporting/inquiries – it is a sophisticated debt collector and the decisions outlined in this Complaint and that will be shown through discovery were not “rogue” or “outlier” decisions but instead represent a well thought out plan and scheme to take money from Alabama consumers (including Plaintiff) that Defendant Transworld has no right to take under state law and under the FDCPA.
43. The conduct of the Defendant Transworld has proximately caused Plaintiff past and future monetary loss, past and future damage to Plaintiff’s credit and creditworthiness, past and future mental distress and emotional anguish, and other damages that will be presented to the trier of fact.
44. It is a practice of the Defendant Transworld to maliciously, willfully, recklessly, wantonly and/or negligently ignore and refuse to follow the requirements of the FDCPA and state law.
45. All actions taken by the Defendant Transworld were done with malice, were done willfully, and were done with either the desire to harm Plaintiff and/or with the knowledge that its actions would very likely harm Plaintiff and/or that its actions were taken in violation of the FDCPA and/or state law and/or that it knew or should have known that its actions were in reckless disregard of the FDCPA and/or state law.
46. Defendant Transworld has refused to apologize to Plaintiff for its wrongful collection activities.

CAUSES OF ACTION

COUNT I.

VIOLATIONS OF THE FAIR DEBT COLLECTION PRACTICES ACT

15 U.S.C. § 1692d

47. Plaintiff incorporates by reference all of the paragraphs of this Complaint as though fully stated herein.
48. Section 1692d states, “A debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt.”
49. Defendant Transworld violated Section 1692d by collecting this debt as alleged in this Complaint.
50. The conduct of the Defendant Transworld has proximately caused Plaintiff past and future monetary loss, past and future damage to Plaintiff’s credit and creditworthiness, past and future mental distress and emotional anguish, and other damages that will be presented to the trier of fact.

COUNT II.

VIOLATIONS OF THE FAIR DEBT COLLECTION PRACTICES ACT

15 U.S.C. § 1692e

51. Plaintiff incorporates by reference all of the paragraphs of this Complaint as though fully stated herein.
52. Section 1692e prohibits, “A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section [and the subsections of 1692e follow].”
53. Defendant Transworld violated Section 1692e by collecting this debt as alleged in this Complaint.
54. The conduct of the Defendant Transworld has proximately caused Plaintiff past and future monetary loss, past and future damage to Plaintiff’s credit and creditworthiness, past and future mental distress and emotional anguish, and other damages that will be presented to the trier of fact.

COUNT III.

VIOLATIONS OF THE FAIR DEBT COLLECTION PRACTICES ACT

15 U.S.C. § 1692e(2)

55. Plaintiff incorporates by reference all of the paragraphs of this Complaint as though fully stated herein.
56. Section 1692e(2) prohibits, “The false representation of the character, amount, or legal status of any debt;”
57. Defendant Transworld violated Section 1692e(2) by collecting this debt as alleged in this Complaint.
58. The conduct of the Defendant Transworld has proximately caused Plaintiff past and future monetary loss, past and future damage to Plaintiff’s credit and creditworthiness, past and future mental distress and emotional anguish, and other damages that will be presented to the trier of fact.

COUNT IV.

VIOLATIONS OF THE FAIR DEBT COLLECTION PRACTICES ACT

15 U.S.C. § 1692e(8)

59. Plaintiff incorporates by reference all of the paragraphs of this Complaint as though fully stated herein.
60. Section 1692e(8) prohibits, “Communicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed.”
61. Defendant Transworld violated Section 1692e(8) by collecting this debt as alleged in this Complaint.
62. The conduct of the Defendant Transworld has proximately caused Plaintiff past and future monetary loss, past and future damage to Plaintiff’s credit and creditworthiness, past and future mental distress and emotional anguish, and other damages that will be presented to the trier of fact.

COUNT V.

VIOLATIONS OF THE FAIR DEBT COLLECTION PRACTICES ACT

15 U.S.C. § 1692e(10)

63. Plaintiff incorporates by reference all of the paragraphs of this Complaint as though fully stated herein.
64. Section 1692e(10) prohibits, “The use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.”
65. Defendant Transworld violated Section 1692e(10) by collecting this debt as alleged in this Complaint.
66. The conduct of the Defendant Transworld has proximately caused Plaintiff past and future monetary loss, past and future damage to Plaintiff’s credit and creditworthiness, past and future mental distress and emotional anguish, and other damages that will be presented to the trier of fact.

COUNT VI.

VIOLATIONS OF THE FAIR DEBT COLLECTION PRACTICES ACT

15 U.S.C. § 1692f

67. Plaintiff incorporates by reference all of the paragraphs of this Complaint as though fully stated herein.
68. Section 1692f states, “A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt.”
69. Defendant Transworld violated Section 1692f by collecting this debt as alleged in this Complaint.
70. The conduct of the Defendant Transworld has proximately caused Plaintiff past and future monetary loss, past and future damage to Plaintiff’s credit and creditworthiness, past and future mental distress and emotional anguish, and other damages that will be presented to the trier of fact.

COUNT VII.

VIOLATIONS OF THE FAIR DEBT COLLECTION PRACTICES ACT

15 U.S.C. § 1692f(1)

71. Plaintiff incorporates by reference all of the paragraphs of this Complaint as though fully stated herein.
72. Section 1692f(1) forbids, “The collection of any amount (including any interest, fee, charge, or expense incidental to the principal obli­gation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law.”
73. Defendant Transworld violated Section 1692f(1) by collecting this debt as alleged in this Complaint.
74. The conduct of the Defendant Transworld has proximately caused Plaintiff past and future monetary loss, past and future damage to Plaintiff’s credit and credit worthiness, past and future mental distress and emotional anguish, and other damages that will be presented to the trier of fact.

COUNT VIII.

INVASION OF PRIVACY

75. Plaintiff incorporates by reference all of the paragraphs of this Complaint as though fully stated herein.
76. Alabama law recognizes Plaintiff’s right to be free from invasions of privacy and Defendant Transworld violated Alabama state law as described in this Complaint.
77. Congress explicitly recognized a consumer’s inherent right to privacy in collection matters in passing the Fair Debt Collection Practices Act, when it stated as part of its findings:

Abusive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy.

15 U.S.C. § 1692(a) (emphasis added).

78. Congress further recognized a consumer’s right to privacy in financial data in passing the Gramm Leech Bliley Act, which regulates the privacy of consumer financial data for a broad range of “financial institutions” including debt collectors (albeit without a private right of action), when it stated as part of its purposes:

It is the policy of the Congress that each financial institution has an affirmative and continuing obligation to respect the privacy of its customers and to protect the security and confidentiality of those customers’ nonpublic personal information.

15 U.S.C. § 6801(a) (emphasis added).

79. Defendant Transworld intentionally, recklessly, and/or negligently interfered, physically or otherwise, with the solitude, seclusion and/or private concerns or affairs of the Plaintiff, namely, by repeatedly and unlawfully attempting to collect a debt and thereby invaded Plaintiff’s privacy.
80. Defendant Transworld intentionally, recklessly, and/or negligently caused emotional harm to Plaintiff by engaging in highly offensive conduct in the course of collecting this debt, thereby invading and intruding upon Plaintiff’s right to privacy.
81. Plaintiff had a reasonable expectation of privacy in Plaintiff’s solitude, seclusion, private concerns or affairs, and private financial information.
82. The conduct of Defendant Transworld, in engaging in the above-described illegal collection conduct against Plaintiff, resulted in multiple intrusions and invasions of privacy by Defendant Transworld which occurred in a way that would be highly offensive to a reasonable person in that position.
83. Defendant Transworld knows that Plaintiff owes no money on this alleged debt but continues to collect against Plaintiff using every weapon in its arsenal including credit reporting/inquiries, collection calls, collection letters, etc.
84. All of the wrongful acts described in this Complaint demonstrate the wrongful scheme, plan, and design of Defendant Transworld in its campaign of improper debt collection, which has led to the Plaintiff’s privacy being invaded.
85. The conduct of the Defendant Transworld has proximately caused Plaintiff past and future monetary loss, past and future damage to Plaintiff’s credit and creditworthiness, past and future mental distress and emotional anguish, and other damages that will be presented to the trier of fact.
86. As a result of such intrusions and invasions of privacy, Plaintiff is entitled to actual damages in an amount to be determined at trial from Defendant Transworld.
87. All acts of Defendant Transworld were committed with malice, intent, wantonness, and/or recklessness and as such Defendant Transworld is subject to punitive damages.

COUNT IX.

NEGLIGENT HIRING, TRAINING, AND SUPERVISION OF

INCOMPETENT DEBT COLLECTORS

88. Plaintiff incorporates by reference all of the paragraphs of this Complaint as though fully stated herein.
89. Defendant Transworld’s collectors are allowed and encouraged to break state law in order to collect debts.
90. This includes all of the violations of the law described in this Complaint.
91. Defendant Transworld is aware of the wrongful conduct of its collectors.
92. Defendant Transworld negligently hired, trained, retained or supervised incompetent debt collectors, who were allowed or encouraged to violate the law as was done to Plaintiff, and Defendant Transworld is thereby responsible to the Plaintiff for the wrongs committed against Plaintiff and the damages suffered by Plaintiff.
93. Plaintiff does not know the names and identities of the specific employees/agents who violated the law but will obtain that information from Defendant Transworld in this case as well as the details of the incompetent hiring, training, and supervision of debt collectors. It is reasonable to infer this as there is no other explanation for how a sophisticated debt collector with compliance employees and lawyers, could possibly allow repeated violations of the law against Plaintiff to happen, unless this was part of a plan to be negligent in allowing incompetent collectors to run wild and damage Plaintiff while Defendant Transworld sat back to reap the rewards of the wrongful conduct it had sowed. The details of this will come out in discovery.
94. The conduct of the Defendant Transworld has proximately caused Plaintiff past and future monetary loss, past and future damage to Plaintiff’s credit and creditworthiness, past and future mental distress and emotional anguish, and other damages that will be presented to the trier of fact.

COUNT X.

WANTON HIRING, TRAINING, AND SUPERVISION OF

INCOMPETENT DEBT COLLECTORS

95. Plaintiff incorporates by reference all of the paragraphs of this Complaint as though fully stated herein.
96. Defendant Transworld’s collectors are allowed and encouraged to break state law in order to collect debts.
97. This includes all of the violations of the law described in this Complaint.
98. Defendant Transworld is aware of the wrongful conduct of its collectors.
99. Defendant Transworld wantonly hired, trained, retained, or supervised incompetent debt collectors, who were allowed or encouraged to violate the law as was done to Plaintiff, and Defendant Transworld is thereby responsible to the Plaintiff for the wrongs committed against Plaintiff and the damages suffered by Plaintiff.
100. Plaintiff does not know the names and identities of the specific employees/agents who violated the law but will obtain that information from Defendant Transworld in this case as well as the details of the incompetent hiring, training, and supervision of debt collectors. It is reasonable to infer this as there is no other explanation for how a sophisticated debt collector with compliance employees and lawyers, could possibly allow repeated violations of the law against Plaintiff to happen, unless this was part of a plan to be wanton in allowing incompetent collectors to run wild and damage Plaintiff while Defendant Transworld sat back to reap the rewards of the wrongful conduct it had sowed. The details of this will come out in discovery.
101. The conduct of the Defendant Transworld has proximately caused Plaintiff past and future monetary loss, past and future damage to Plaintiff’s credit and creditworthiness, past and future mental distress and emotional anguish, and other damages that will be presented to the trier of fact.

COUNT XI.

INTENTIONAL HIRING, TRAINING, AND

SUPERVISION OF INCOMPETENT DEBT COLLECTORS

102. Plaintiff incorporates by reference all of the paragraphs of this Complaint as though fully stated herein.
103. Defendant Transworld’s collectors are allowed and encouraged to break state law in order to collect debts.
104. This includes all of the violations of the law described in this Complaint.
105. Defendant Transworld is aware of the wrongful conduct of its collectors.
106. Defendant Transworld intentionally hired, trained, retained, or supervised incompetent debt collectors, who were allowed or encouraged to violate the law as was done to Plaintiff, and Defendant Transworld is thereby responsible to the Plaintiff for the wrongs committed against Plaintiff and the damages suffered by Plaintiff.
107. Plaintiff does not know the names and identities of the specific employees/agents who violated the law but will obtain that information from Defendant Transworld in this case as well as the details of the incompetent hiring, training, and supervision of debt collectors. It is reasonable to infer this as there is no other explanation for how a sophisticated debt collector with compliance employees and lawyers, could possibly allow repeated violations of the law against Plaintiff to happen, unless this was part of a plan to be intentional in allowing incompetent collectors to run wild and damage Plaintiff while Defendant Transworld sat back to reap the rewards of the wrongful conduct it had sowed. The details of this will come out in discovery.
108. The conduct of the Defendant Transworld has proximately caused Plaintiff past and future monetary loss, past and future damage to Plaintiff’s credit and creditworthiness, past and future mental distress and emotional anguish, and other damages that will be presented to the trier of fact.

COUNT XII.

NEGLIGENCE, WANTONNESS, MALICE AND/OR INTENTIONAL CONDUCT

109. Plaintiff incorporates by reference all of the paragraphs of this Complaint as though fully stated herein.
110. Defendant Transworld owes a duty to Plaintiff not to expose Plaintiff to unnecessary harm.
111. Defendant Transworld has violated its duty to Plaintiff in all of its conduct with Plaintiff.
112. Such violations were made negligently, wantonly, maliciously, and/or intentionally.
113. The actions of Defendant Transworld proximately and directly harmed Plaintiff.
114. The conduct of the Defendant Transworld has proximately caused Plaintiff past and future monetary loss, past and future damage to Plaintiff’s credit and creditworthiness, past and future mental distress and emotional anguish, and other damages that will be presented to the trier of fact.

PRAYER FOR RELIEF

            WHEREFORE, PREMISES CONSIDERED, Plaintiff prays that judgment be entered against Defendant Transworld for all damages allowable (including statutory, actual, compensatory, nominal and punitive the total of which Plaintiff claims more than $75,000.00), costs, expenses, attorney fees, injunctive relief to prevent further violations, and for such other and further relief as may be just and proper.

Respectfully Submitted,

/s/ John G. Watts                                           

John G. Watts (WAT056)

Stan Herring (HER037)

Attorneys for Plaintiff

OF COUNSEL:        

Watts & Herring, LLC

The Kress Building

301 19^th Street North

Birmingham, Alabama 35203

(205) 879-2447

(888) 522-7167 facsimile

john@wattsherring.com

stan@wattsherring.com

Serve defendant via certified mail at the following address:

Transworld Systems Inc.

C/O CT Corporation System

2 North Jackson St., Suite 605

Montgomery, AL 36104