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DISCLAIMER: This article is based on a complaint. The defendant has not responded to the complaint to present its side of the case. The claims mentioned are accusations and should be considered as such until and unless proven otherwise.
How long can the tail of a data breach be? In this particular case: 14 years. A student loan servicer, a nonprofit that provides enrollment and financial aid services to educational institutions, and a community college are facing a lawsuit in Washington federal court from a plaintiff who claims a fraudulent student loan, allegedly the product of identity theft dating back to a 2012 breach of a state revenue agency’s records, keeps reappearing on his credit report no matter how many times he successfully disputes it. The suit was originally filed in state court and was removed to federal court by the servicer defendants.
The background: The plaintiff, an attorney representing himself, claims he has never borrowed under any student loan program from any lender. His personal identifying information was allegedly stolen when foreign hackers breached the South Carolina’s revenue department’s records in 2012, and he claims to have been the victim of multiple instances of identity theft since then.
- In 2023, the plaintiff allegedly became aware of an unauthorized credit inquiry by the servicer. He disputed it, and the credit bureaus removed it.
- In 2024, a fraudulent student loan account allegedly appeared on his credit report. The bureaus investigated, ruled in his favor, and removed it, only for the account to reappear months later. A third dispute was also resolved in the plaintiff’s favor.
- The plaintiff filed complaints with the Consumer Financial Protection Bureau and the Department of Education. In responding to the CFPB complaint, the servicer allegedly recommended the plaintiff follow the Department of Education’s fraud reporting procedures, which direct victims to file a complaint with the CFPB, the very complaint the servicer was responding to.
- The servicer allegedly claimed one of its responses included a copy of the promissory note, but no note was attached, according to the complaint.
- The loans were allegedly disbursed to and through the community college, and the plaintiff claims he continued receiving overdue notices from the servicer and the nonprofit into 2026.
The claims: The complaint accuses the defendants of negligently and willfully violating the Fair Credit Reporting Act by continuing to collect, report, and re-report a known fraudulent debt, failing to properly investigate disputes, pulling the plaintiff’s credit report without authorization, failing to provide adverse action notices, and failing to maintain an identity theft prevention program with appropriate “red flag” policies.
- The complaint also includes claims of negligence and negligence per se, accusing the defendants of failing to verify the identity of the person seeking the loans and of continuing to originate new loans in the plaintiff’s name after his successful disputes.
- The complaint rounds out its counts with claims of defamation, intentional infliction of emotional distress, and violations of Washington’s Consumer Protection Act.
