Sallie Mae Reaches $24M Settlement in Telephone Debt Collection Class Action

Sallie Mae Reaches $24M Settlement in Telephone Debt Collection Class Action

SEATTLE - (Mealey's) Student loan borrowers and a subsidiary of SLM Corp. on Sep. 17 agreed to settle claims that the subsidiary violated the Telephone Consumer Protection Act (TCPA) by making a number of non-emergency autodialed calls and/or automated text messages to the borrowers' cellular telephones in an attempt to collect on outstanding student loan debt, according to documents filed in a Washington federal court (Mark A. Arthur, et al. v. Sallie Mae Inc., No. 10-0198, W.D. Wash.).

Under the terms of the settlement, which is subject to final approval, Sallie Mae will pay $24.15 million to the borrowers that received the autodialed calls or automated text messages to their cellular phones by Sallie Mae Inc.

The borrowers sued Sallie Mae in the U.S. District Court for the Western District of Washington on behalf of a class of those similarly situated.  They alleged that Sallie Mae's representatives made numerous non-emergency autodialed calls and issued numerous automated text messages to borrowers with outstanding debts via their cell phones in violation of the TCPA.

In a Jan. 10 order, Judge James L. Robart held that although certification of a provisional settlement class is appropriate and that the amended settlement between the parties is fair, changes to the proposed forms of class notice were necessary before preliminary approval of the settlement could be granted.


The borrowers are represented by Beth E. Terrell, Michael D. Daudt and Marc C. Cote of Terrell Marshall Daudt & Willie in Seattle; Jonathan D. Selbin and Alison Stocking of Lieff, Cabraser, Heimann & Bernstein in New York; Daniel M. Hutchinson of Lieff Cabraser in San Francisco; David P. Meyer and Mathew R. Wilson of David P. Meyer & Associates Co. in Columbus, Ohio; Joshua Swigart, Robert L. Hyde and David C. Leimbach of Hyde & Swigart in San Diego; Douglas J. Campion of San Diego; and Abbas Kaserounian of Kaserounian Law Group in Santa Ana, Calif.

Sallie Mae is represented by Lisa M. Simonetti of Stroock & Stroock & Lavan In Los Angeles.

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