Thursday 06 December 2018
GoLocalProv.com has learned that the Cranston School Board has hired a controversial national collection agency to track down parents and guardians who owe the city’s school department unpaid school meals.
The hired company was recently fined by a federal agency for its activities.
âIn an effort to reduce our outstanding balance, the District retained the services of a collection agency. The company is Transworld Systems and they will begin their collection efforts effective Jan. 2, 2019, âaccording to the Cranston School Department.
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In an email to parents, officials at Cranston wrote: âIn the past, the school district has attempted to collect unpaid meal balances with little success. From September 1, 2016 to June 30, 2018, the school district wrote off $ 95,508. This current year (2018-2019) the outstanding balance is $ 45,589. The District Meal Program cannot continue to lose income.
Cranston Mayor Allan Fung, reached by phone Wednesday evening, said he was unaware of the Cranston School Department’s decision to hire a collection agency.
âDuring this period, the district sent late notices to our parents / guardians with very little success. The school committee asked us to issue a tender (request for proposals) to help collect unpaid balances, âCranston School’s departmental operations manager Raymond Votto, Jr. said in an email Wednesday night to GoLocal.
Votto added, âThe school committee asked us to issue a call for tenders (request for proposals) to help with the collection of outstanding balances. I am not in my office so I do not have the exact date, but the school committee awarded the submission to a company a few months ago which requested the establishment of a professional collection program which must start Jan. 2. “
Transworld linked to multiple controversies
The collection agency selected by Cranston officials was recently fined by federal officials for illegal activities related to the company’s debt collection activities.
The Federal Bureau of Consumer Financial Protection on Monday fined the National Collegiate Student Loan Trusts and their debt collector, Transworld Systems of Fort Washington, $ 21.6 million in unlawful debt collection lawsuits student loans, âaccording to the Philadelphia Inquirer.
And, under a separate federal consent order, Transworld Systems was ordered to pay an additional civil fine of $ 2.5 million.
According to the New York Times, Transworld’s collection activities are sometimes heavy.
âA woman in a suburb of Columbus, Ohio, has been sued twice, by two different creditors, for the same delinquent student loan. Another person in Illinois was sued over a loan that had already been repaid. And hundreds of borrowers have been sued for debts so old that they were no longer legally collectable.
The cases all involved the same debt collector: Transworld Systems, âthe NY Times reported.
In the newspaper’s 2017 report, âStudent loans have skyrocketed over the past decade, becoming the main source of household debt outside of mortgages. The growing wave of defaults has also turned into a lucrative business, with companies raising tens of millions of dollars through settlements, salary garnishments and other forced payments.
Transworld Systems has been one of the most prolific debt collectors, filing over 38,000 lawsuits over the past three years on behalf of a single client, the National Collegiate Student Loan Trusts. But many cases were flawed, as the debt collector produced mass-produced documentation based on limited verification, according to legal documents filed by a federal regulator and a New York Times analysis of court records of hundreds. of cases.
The national collection agency says it is “the leading provider of outsourced accounts receivable and loan management solutions.” Their data-driven services have injected more than $ 6 billion in cash flow into our clients’ businesses over the past decade. Its clients include both B2B and B2C Fortune 100 companies, national healthcare systems, financial institutions, large-scale government organizations, and small businesses. “
Transworld has already found the money for school meals
Reports of Transworld’s lunch fundraisers have been in the national news in the past.
ABC News reported in 2010 that a low-income school district in Georgia turned to Transworld to locate a relative in order to collect overdue lunch bills.
âA low-income county school district in Georgia, facing dwindling resources, hired a collection agency to get parents to pay off their children’s school meal debt.
Cash-strapped Brantley County School District officials insist the new policy is the best way to recoup losses and prove to listeners that the debt wouldn’t simply be imposed on taxpayers.
âWe have to try every means to try to collect the debt,â said Van Herrin, vice chairman of the Brantley County Board of Education.
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