3 On Your Side

Collection agency pursues 50-year-old student loan

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Ralph Caswell was stunned to receive the collection notice. (Source: 3TV) Ralph Caswell was stunned to receive the collection notice. (Source: 3TV)
(Source: 3TV) (Source: 3TV)
According to FMS, Caswell owes $1,400 in interest, $87 for some kind of penalty and an extra $362 for fees and costs which comes to $1,938. (Source: 3TV) According to FMS, Caswell owes $1,400 in interest, $87 for some kind of penalty and an extra $362 for fees and costs which comes to $1,938. (Source: 3TV)
(3 ON YOUR SIDE) -

Ralph Caswell heads out of his Phoenix apartment and goes straight to his mailbox.

It's a daily routine, but on a recent trip to check his mail, Caswell pulled out something a little unusual.  

"It just seems like a scam, that's why I contacted 3OYS," Caswell said.

Caswell received a very suspicious piece of mail from a collection agency called FMS. According to FMS, Caswell owes more than $1,900 in student loans.

But here's the kicker. Those loans are from the 1960s. 

"It's been 50 years," Caswell said, laughing. "It's been quite awhile."

Nearly 50 years ago, Caswell served in the U.S. Navy. After getting out, he decided to attend college.

But to do that, he needed money. So he took out some small student loans.  

"In 1968, I applied for a student loan," he said. "I got one for $1,000 for one year."

In addition to that $1,000 loan, Caswell says he took an extra $500 loan and then another $1,000 later on.

In all, Caswell says he had three loans totaling $2,500, loans he says he paid back in full decades ago.

But now FMS is demanding around $1,900 -- or else. 

"Well, it's a lot of money. It is a lot of money," Caswell says, and he's concerned.

According to the agency, the principal owed is zero, but it states that Caswell owes $1,400 in interest, $87 for some kind of penalty and an extra $362 for fees and costs which comes to $1,938.

3 On Your Side contacted FMS, but an attorney representing the collection agency refused to speak about the issue citing confidentiality rules.
Caswell said the entire situation is disturbing. He's supposed to produce documents proving he paid off the 50-year-old loans or be faced be faced with paying them again.

Caswell wonders who keeps documents from 50 years ago. 

"It's kind of scary because I have good credit, and I pay my bills," he said.

It should be noted that FMS is owned by a company called Ceannate. The attorney for the company told us there is no statute of limitations when it comes to pursuing payments for student loans. Other than that comment, the attorney would not provide any information including validating the student loan or interest, penalty and fees it claims Caswell owes.

3 On Your Side is also waiting to hear back from the U.S. Department of Education regarding this issue. Unfortunately, after numerous phone calls and emails, no one from the agency has responded to our inquiries.

3 On Your Side will stay on top of this one let you know what happens in the future.

Copyright 2016 KTVK (KPHO Broadcasting Corporation). All rights reserved.


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