Just had Conserve call me yesterday. I had two student loans that defaulted years ago and through another collection service (DCS) had them rehab and consolidated them myself. Been in repayment since July 2009. When I filed our taxes this year (filed Feb 2010 for 2009), our refund was taken for the default. Injured spouse form filed and got $613 back. Loans got consolidated in Feb 2010, but the offset was still on when IRS said refund amount was okay, so all sent to Dept of Ed. Got $613 back in May 2010, and Dept of Ed sent letter about paying that on June 10, 2010 (They had to refund that to the IRS). Talked to Dept of Ed in May and was told that the $613 would be added to the Consolidated loans. The $613 was added on June 15 according to Direct Loan Servicing account for me. Dept of Ed said it was added on June 18. On June 21, Conserve calls saying I owe $762.20 in defaulted student loan. I called Dept of Ed on June 22 and was told I had a $0.00 balance. I call Conserve within moments and was told I owe $149.20, which was collection costs, interest and penalties. I explained I called Dept of Ed and they say I owe them absolutely nothing (I requested a letter from Dept of Ed about my zero balance and will get it in 7-10 days). Conserve said I had to pay the $149.20 as it wasn't paid according to their way of checking the Dept of Ed's website account for me. I told them I will be getting a letter from Dept of Ed and they want me to fax it when I get it. Got off the phone and called Dept of Ed again, verified once again I owe them nothing and got a person's name about this and called Conserve back and gave the rep there the name of the Dept of Ed employee who can verify that I owe nothing.
I don't trust the collection agencies that the Dept of Ed contracts with as DCS (Diversified Collection Services) whom helped me rehab my loans didn't do what they said they were going to do. When payment arrangements were made with them, they had me sign a promissary note for consolidating my loans in 3 months (the time the Dept of Ed requires of repayment before consolidating). I signed it and mailed that back in July 2009 as they asked me to do. So in October 2009, my loans were supposed to be consolidated and taken out of default status according to the arrangements made to repay my loans. Well, in Feb 2010, when my hubby and I filed our taxes, we get a notice that I owe Dept of Ed on defaulted student loans. I called DCS and they gave me the biggest run around I ever heard, from saying they needed to collect 12 months of repayment before filing consolidation papers to 6 months of payments to saying I could not qualify for consolidation. I even had a DCS supervisor tell me that Loan Consolidation had no funding available in Feb 2010 to buy loans. Each of those answers were given in 4 different phone calls I made to them to get info on why they didn't file consolidation for me as they promised. I called Dept of Ed and Direct Loan Consolidation and both told me to go online and fill out the form to consolidate my loans myself. That I did asap. Direct Loan Consolidation told me that they had a 3 week period in Noverber 2009 that they had no funding to buy loans and that was it.
Well, my loans were consolidated and my loans was taken out of default status on Feb 17, 2010 and when this reversal of the tax refund offset added back, on May 17, 2010, it put me back into default status, even though Direct Loan Servicing automatically debits my bank each month.
I know I will have to watch my tax refund for 2010 in 2011 when it's filed as it may still have an offset against me for loans if good repayment status. Keep and eye on things and write down who you talk with, what company they are with and what they say each time you talk about these kind of debts as when you are armed with this info, it makes it easier for the originating company (Dept of Ed in this case) to inquire what is going on.
I am in the process of filing a formal complaint against DCS for their mishandling of my account (not consolidating it when they said they would) and hope that they are made to pay penalties for that.