ERUDIO student loans help

fermi

Please send the details to news@moneysavingexpert.com

Thanks.

erudioed

ericctheking wrote: »

Just to let everyone now Erudio did split someones loans.
They botched up all the paperwork asking for more info etc, and took DDs when the loans where already deferred.
The person involved hasn't lost out financially as the DDs were refunded eventually! Well I guess they lost out on the time value of money. Erudio should have paid interest on the time they had the money!
Anyway they where told by Erudio that the lender decides the deferment date so it's now different times of the year for different loans. Erudio say this is in the terms and conditions and the terms and conditions haven't changed according to them.

Thanks for finding out. Something still seems amiss to me though. That would cause all kinds of outrage, and since their last Direct Debit thefts and all the negative publicity around that, doing something like this would be too outrageous from their perspective. Im not saying it might not be the next new trick, but if it turns out to be just an advisor saying such a thing, i think your friend should note down the date of the call and get onto the complaints. If they were told such a thing, maybe they could get some compensation for being told blatant lies. However, on the flip side, if it is true...

erudioed

Mr_McGuffin wrote: »

'The Taskforce on Fraud, Error and Debt was established in late 2010 to create a high‐level, cross‐Whitehall group to address the enormous level of unacceptable losses. The focus of its first report is combating fraud. The Taskforce brought together fraud professionals from both the private and public sector. It oversaw eight pilots that tested new approaches to tackling fraud, including the more efficient use of credit reference agency information, the deployment of data analytics, and the use of insights from behavioural science to improve how fraud is combated.' p.3

Annex 2 summarises these fraud pilots, which involved partnerships with CRAs and 'data matching companies'.

The Fraud, Error and Debt Taskforce was set up to address 'unacceptable losses' not only through fraud and error, but through debt also. The NAO Report seems to say it was working with BIS and the SLC.

That was very interesting again.
What do you think one of those schemes would look like and who may be involved in such a thing. How about this, Arrow Global's Experian Collections Network:
http://www.arrowglobal.net/lib/docs/133657-experian-and-arrow-faqs.pdf

So BIS, Arrow Global together again? I know it should be appreciated if a private company is invited to help the government, but its another thing being given a sweetner in another deal. Isnt there a declaration of mutual interest thing that applies to such things, such as the sale of almost £1 billion worth of loans. If that were true, wouldnt the due diligence process or something else include such information like a declaration of interests?
Well, im just saying, if this is related to your post that is.

anna2007

ericctheking wrote: »

Anyway they where told by Erudio that the lender decides the deferment date so it's now different times of the year for different loans. Erudio say this is in the terms and conditions and the terms and conditions haven't changed according to them.

The bit from the regs Erudio are trying to manipulate:

"Each deferment period will last for 12 months beginning on a date the lender tells the borrower. This date will be not more than three months before or two months after the date the lender accepts the borrower’s deferment application".

I can see how they might be able to say they decide the deferment for a new deferment application, but a continuing deferment has to run concurrently, otherwise Erudio are breaching the regs, as each deferment period must last 12 months.

As for splitting the loans, whether it's a new or continuing deferment, what reasonable justification could they possibly give for doing that, when it creates 3x the work, not just for the borrower, but for Erudio too? Surely an ombudsman or court would see that as nothing more than Erudio being deliberately obstructive, particularly when the SLC spent 20 years deferring all of a borrower's loans at the same time. It's completely ridiculous!

GinOClock

I am very much interested in Mr McGuffin's post insofar as it mentions self-certification in terms of deferment during the HoC debate.

On Erudio's DAF, the signature and warranty incorporates a section which forces the signatory to give permission for Erudio to conduct a credit check on the applicant. The regulations and CCA give no such permission, hence why Erudio has to ask for it specifically.

Now. In the FAQ Erudio mentions that it is to, for example, check identity or income and it will leave a footprint that is visible to anyone who looks at your credit file.

Firstly, for identity. That can be conducted by making a 'soft' check on your credit file. This does not leave a footprint on your file and only you and the organisation that conducted that check would be able to see it. Though why they would want to check your identity 20 years on is another matter entirely.

Secondly, income. Your credit file does not contain details of your income (e.g. salary, tax credits etc.) It only contains details of your credit agreements and how you manage them. I cannot see how this would be relevant - any money your receive on credit creates a corresponding liability so cannot be classed as income as such.

In fact in the FAQ Erudio state:

"This check will leave a "footprint" on your credit file to show to you and others that you have applied for a deferral and that Erudio Student Loans has accessed your information."

To me, that almost reads as a direct threat. Apply for deferment, and the consequences will be...

anna2007

@ GinOClock My understanding of the signature/warranty part of the DAF is that you're authorising Erudio to verify your income with the organisations or people from where your income's derived, so your employer, HMRC, etc (the reference to their "statutory powers" was debunked by Mr McGuffin a few pages back - it's nothing more than an empty threat).

The 'consent' for Erudio to check your credit file is under the WARNING, below the warranty at the bottom of page 5, where it says that by submitting the DAF, you're agreeing to Erudio checking your details with CRA's and fraud prevention agencies. It also states that Erudio has the right to perform these checks, in accordance with the terms of the original loan agreement, but there's no reference to these checks in the terms.

Your point about the 'soft check' on our credit files sounds like a debunking of the 'footprint' threat - I take it soft checks are for verifying information (I have plenty of them showing on my credit file for insurance quotes), but a proper search that's visible to others would be for an actual credit application, is that right?

I agree the info under Erudio's FAQ's reads like a threat, but I'm beginning to think that's all it is, another empty threat, otherwise why hasn't Erudio reported all of our deferred loans by now? I usually use Noddle to check my credit file, but signed up to Experian's free trial - there's not even the ominous 'footprint' from a search, never mind my loans recorded there. I can't help feeling that, if you've been clear about not consenting to Erudio's FPN, they won't risk touching your credit file.

Mr_McGuffin

erudioed wrote: »

That was very interesting again.
What do you think one of those schemes would look like and who may be involved in such a thing. How about this, Arrow Global's Experian Collections Network:
http://www.arrowglobal.net/lib/docs/133657-experian-and-arrow-faqs.pdf

So BIS, Arrow Global together again? I know it should be appreciated if a private company is invited to help the government, but its another thing being given a sweetner in another deal. Isnt there a declaration of mutual interest thing that applies to such things, such as the sale of almost £1 billion worth of loans. If that were true, wouldnt the due diligence process or something else include such information like a declaration of interests?
Well, im just saying, if this is related to your post that is.

Yes, it seems there have been policy decisions at a high level that Government should prioritise the reduction of 'unacceptable losses', and experiment with new techniques to reduce debt, including active use of behavioural science, CRAs, and private contractors. Contracts and deals will go to partners who can get results, and there is enthusiasm for how CRAs and data analytics can help, for sure. Who deals have been done with I don’t know, and how Arrow, Experian and Erudio may fit into that I don’t know. As you know it is all pretty opaque.

I think it’s fair to say though that they are all in an area receiving a lot of attention in Government. Personally, I would imagine this sale of student loans is well within the area of interest for a strategic Fraud, Error and Debt Taskforce, especially as much larger future student loan debt sales are being contemplated.

Mr_McGuffin

Here are the original 1989 estimates for this loan scheme 1990-2027:

http://hansard.millbanksystems.com/written_answers/1989/jul/24/student-loans#S6CV0157P0_19890724_CWA_31

http://hansard.millbanksystems.com/written_answers/1989/jul/24/student-loans#S6CV0157P0_19890724_CWA_36

These tables show the estimated number of loans to be written off each year between 2016 and 2026 due to deferment continuing for 25 years. I calculate this to be between 11% and 15% of the loans issued each year.

There was also an assumed default rate of 10% for accounts not in deferment.

The BIS sale to Erudio comprised 17% of the loans originally issued. From the figures given by the BIS press release announcing the sale, 55% of loans issued had been retained by SLC after the previous sales in 1998 and 1999.

Thanks to anna2007 for the last available figures prior to the sale for the year 2012-13:

http://www.slc.co.uk/official-statistics/full-catalogue-of-official-statistics/student-loans-debt-and-repayment.aspx

From these, my reckoning is that out of the loans retained by the SLC in 1999, 13% were in deferment prior to the sale to Erudio, three years before any cancellations.

I take those described as 'overdue with no repayment schedule' to be 'in default'. These amounted to 10.7% of the loans retained by the SLC in 1999, after excluding loans in deferment.

A figure of 13% of loans deferred and still three years from any cancellation is well within the range of the original estimates for this loan scheme. 11% default is just outside an assumed default rate of 10%.

By this measure, these loans were scarcely 'underperforming'. They were performing very close to their original estimates. They may well outperform these estimates, as the loans in deferment have not yet reached cancellation date.

If this is not now a valid measure of performance, then what is?

The characterisation of these loans as 'underperforming' was a central justification for the sale to Erudio. By what measure were they 'underperforming'?

In evidence to the Public Accounts Committee in December 2013, the Permanent Secretary of BIS Martin Donnelly described these loans as 'the last distressed loans of the large portfolio', and the Chief Executive of the SLC Mick Laverty characterised them as 'the rump of the loan book'. In evidence to the BIS Committee in January 2014 the Minister for Universities and Science David Willetts repeatedly described them as 'underperforming'. These characterisations were accepted without question by the MPs of these committees.

I believe MPs should be aware that this asset was classified as 'underperforming' for the purposes of the sale, while at the same time loans in deferment were recognised and counted as behaving correctly and as expected by BIS and the SLC. The majority of loans sold, 64% from the SLC figures, were counted by BIS as 'in a repayment channel' at the time of the sale, while the Minister responsible would later say: 'Most of them were no longer in repayment.' (David Willetts, BIS Committee, Oral evidence: Student loans, 14 January 2014).

In fact, the performance of these loans almost exactly matched the original estimates.

I do not believe this is something that the FOS or FCA will or can fix. I think it will need politicians to act. And I believe it must also go to real courts. Our situation with Erudio is the direct result of the decisions made by BIS. I believe everyone affected by this should write to their MP not just to ask for help but to complain strongly about what has been done.


Contains Parliamentary information licensed under the Open Parliament Licence v.1.0
Contains public sector information licensed under the Open Government Licence v2.0

clairet707

Ive had a notice of arrears letter from Erudio.

My deferrment is in April, I deferred successfully with SLC / Honours prior to the movement of my loans to Erudio, Erudio didnt work this out and took my dd anyway which I successfully got back.

However I have now had this notice of arrears letter saying I am now 2 months in arrears. And they are saying I owe them £269.42.

What do I do now?

rizla_king

Complain to the incompetent retards and demand they cancel the arrears. Plus that you will be taking a complaint against them to the FOS.