WEBVTT - The Seven Minute Rule 0:00:15.276 --> 0:00:23.516 Pushkin. I live in Berkeley, California. It's a peaceful place 0:00:23.596 --> 0:00:26.716 for an American city. In twenty years, I've never so 0:00:26.836 --> 0:00:30.396 much as noticed the police station. Never occurred to me 0:00:30.476 --> 0:00:33.116 that I even needed to know where it was. So 0:00:33.476 --> 0:00:38.676 it's Joe, yes, Zoe. But now here I am inside 0:00:38.716 --> 0:00:42.076 the place, surrounded by cinder block walls and pictures of 0:00:42.196 --> 0:00:45.916 legendary police officers, and across the table from me there's 0:00:45.916 --> 0:00:48.916 a living legend officer, Joe LaDou. So I'm going to 0:00:48.996 --> 0:00:52.356 tell you what happened to me and why I'm here. 0:00:53.116 --> 0:00:58.156 So beginning of last year, we started to get calls 0:00:58.676 --> 0:01:01.516 at eight in the morning from City Group Big Bank, 0:01:02.116 --> 0:01:04.036 and he's like, I was getting the kids out of 0:01:04.076 --> 0:01:06.076 the door of a breakfast and the phone to ring. 0:01:06.156 --> 0:01:08.476 And this happened not ten times, at twenty times, thirty times, 0:01:08.476 --> 0:01:11.036 but fifty time. I mean it was just like harassment. 0:01:11.436 --> 0:01:13.396 And they said I owed the money. And it was 0:01:13.436 --> 0:01:17.116 absolutely bizarre because I didn't never an never any business 0:01:17.116 --> 0:01:19.156 with City Group, I mean, no credit cards, know nothing, 0:01:19.196 --> 0:01:21.156 but they said we had like fifteen thousand dollars of 0:01:21.236 --> 0:01:23.836 outstanding and loans. I just want to say that again 0:01:23.876 --> 0:01:26.716 so you hear it. City Group said I owed them 0:01:26.796 --> 0:01:30.916 fifteen thousand dollars, and so finally I said, look quick 0:01:30.916 --> 0:01:33.356 calling us, you're just driving us crazy in the mornings. 0:01:33.676 --> 0:01:36.476 And for whatever reason, they just stopped calling. Okay. The 0:01:36.596 --> 0:01:38.516 next thing it happens is I get a note from 0:01:38.556 --> 0:01:42.436 American Express saying my credit score has collapsed because I 0:01:42.476 --> 0:01:46.676 have welshed on a debt to City Group. So American 0:01:46.716 --> 0:01:48.916 Express called me and says we're gonna put a limit 0:01:48.956 --> 0:01:51.436 on your account because your FICO score has declined. And 0:01:51.476 --> 0:01:53.196 I called them and said, well, how's this happen? How 0:01:53.236 --> 0:01:57.156 do you even know this? Oh? Well, a credit aggregator 0:01:57.396 --> 0:02:01.156 name Experience has sent us a report saying you've got 0:02:01.156 --> 0:02:04.236 some bad debts. I didn't even know what Experience was 0:02:04.596 --> 0:02:07.516 or what it did. As it turns out, there are 0:02:07.516 --> 0:02:10.076 a bunch of companies that make their money by gathering 0:02:10.116 --> 0:02:13.116 up whatever any one bank or credit card company has 0:02:13.156 --> 0:02:16.116 to say about you, and then spreading the word to 0:02:16.156 --> 0:02:19.276 the others, so that if one bank thinks you owe 0:02:19.316 --> 0:02:22.556 them money, all the others see you as a problem. 0:02:22.836 --> 0:02:26.036 Experience is one of those companies, and I'd become one 0:02:26.076 --> 0:02:29.996 of those problems. Someone claiming to be me opening a 0:02:30.636 --> 0:02:36.036 credit card account with City Bank in Sioux Fall, South Dakota, 0:02:36.156 --> 0:02:42.396 and he gave as his address a street in Miami, 0:02:43.116 --> 0:02:45.556 but it's a street that doesn't even exist. A credit 0:02:45.596 --> 0:02:49.796 limit was fifteen thousand. Somehow he managed to borrow sixteen thousand, 0:02:49.836 --> 0:02:52.036 four hundred and six dollars and repay none of it 0:02:53.236 --> 0:02:57.196 four hundred and six dollars. When I called Experience to 0:02:57.236 --> 0:02:59.396 say how come you have this on my credit report, 0:03:00.156 --> 0:03:01.916 they said, well, we can't do anything about it's a 0:03:01.956 --> 0:03:03.516 city group, said you o them this money. So I 0:03:03.516 --> 0:03:05.956 call City Group and City Group said they didn't know 0:03:05.996 --> 0:03:09.396 who I was, and add no record of my Social 0:03:09.436 --> 0:03:10.996 Security number. I mean, it was just a mass. I 0:03:11.556 --> 0:03:14.596 was stuck in on hold for hours and they gave 0:03:14.636 --> 0:03:18.556 me no joy, I mean no joy at all. Finally, 0:03:18.836 --> 0:03:21.436 Experience tells me that I need to file an identity 0:03:21.476 --> 0:03:25.436 theft complaint with the ftc IS at the Federal Trade Commission, 0:03:25.716 --> 0:03:28.716 which I did, and they said I had to go 0:03:29.396 --> 0:03:32.476 come to the police station and file a report for 0:03:32.516 --> 0:03:35.636 them to take seriously my claim that my identity had 0:03:35.676 --> 0:03:39.676 been stolen. So to summarize myself, just there a big 0:03:39.716 --> 0:03:43.916 New York bank hands fifteen sixteen grand to someone pretending 0:03:43.956 --> 0:03:48.036 to be me, Michael Lewis. Then some credit agency broadcasts 0:03:48.076 --> 0:03:51.156 a total eye about my behavior, and now I need 0:03:51.156 --> 0:03:53.556 to drive down to my local police station and bother 0:03:53.636 --> 0:03:56.836 a local cop. So that's why I'm here. I want 0:03:56.836 --> 0:03:59.996 to file a police report for identity theft, and I 0:04:00.036 --> 0:04:01.556 want to ask you a couple questions about it before 0:04:01.556 --> 0:04:04.036 I do it. And the first is how often do 0:04:04.036 --> 0:04:07.716 you all have people filing identity theft reports with the police? 0:04:08.156 --> 0:04:10.596 Very frequently, so it's this is not weird, it's not 0:04:10.596 --> 0:04:13.236 completely uncommon. No, no, but that isn't the question I 0:04:13.316 --> 0:04:16.596 most wanted an answer to. I've been stewing on another 0:04:16.676 --> 0:04:19.516 question for so long it's almost hard to put it 0:04:19.556 --> 0:04:22.676 into words. I mean, just as a law enforcement officer, 0:04:22.916 --> 0:04:26.276 does it not strike you as strange that I've never 0:04:26.276 --> 0:04:28.236 had anything to do with either one of these parties 0:04:28.436 --> 0:04:31.516 and they wrote me into this and it's my problem. 0:04:31.516 --> 0:04:35.076 All of a sudden, it seems to me that city 0:04:35.116 --> 0:04:37.956 group should be filing some sort of complaint with the police, 0:04:38.036 --> 0:04:39.796 not me, and that I shouldn't have to deal with 0:04:39.836 --> 0:04:43.356 this at all. It's very odd that it's framed this way. 0:04:43.476 --> 0:04:45.796 The whole notion of identity stuff. No one. I'm still 0:04:45.836 --> 0:04:48.716 met for the first time. Officer lad is looking at 0:04:48.756 --> 0:04:52.916 me a little dubiously like I'm crossing some line, like 0:04:52.956 --> 0:04:55.116 I'm going to start asking him for his opinions about 0:04:55.156 --> 0:04:58.876 animal rights or about the local Native American burial ground 0:04:58.916 --> 0:05:00.876 that somehow wound up under the parking lot of a 0:05:00.916 --> 0:05:04.156 fish restaurant. Cops don't control the rules of the game. 0:05:04.316 --> 0:05:07.076 They just enforce them. The very idea that I should 0:05:07.116 --> 0:05:08.956 have to spend a minute having to deal with this 0:05:09.156 --> 0:05:12.116 seems just a little odd. I mean, if you take 0:05:12.116 --> 0:05:14.476 it out of the financial sector and you say I 0:05:14.636 --> 0:05:20.236 managed to persuade Zoe that I am Audrey and I 0:05:20.316 --> 0:05:23.196 get her to lend me ten grand Audrey's my producer 0:05:23.236 --> 0:05:26.996 on this episode, and Zoe is my associate producer. They're 0:05:27.036 --> 0:05:29.676 here at the station with me recording, just standing there 0:05:29.676 --> 0:05:34.876 in their headphones, expressionless, dead eyed. It's alway's not going 0:05:34.916 --> 0:05:38.276 to have any ability to disrupt my life or get 0:05:38.276 --> 0:05:40.196 me invite I mean, it's an odd thing that the 0:05:40.236 --> 0:05:43.436 financial system has now put this sort of strain on 0:05:43.836 --> 0:05:47.596 police resources, it seems to me. So let me put 0:05:47.636 --> 0:05:49.756 it in as a question. If people are coming in 0:05:49.756 --> 0:05:51.916 and filings reports, is taking your time and all the rest. 0:05:52.236 --> 0:05:53.956 Has it ever struck you that it seems a little 0:05:53.956 --> 0:05:55.396 crazy to have the police in the middle of this 0:05:56.436 --> 0:05:58.516 To answer, it's it's interesting in the fact that it's 0:05:58.516 --> 0:06:00.596 a different type of victimization, right. I don't want to 0:06:00.596 --> 0:06:02.436 think of myself as a victim, but if you want 0:06:02.436 --> 0:06:06.276 me to be one, But it turns out I have 0:06:06.396 --> 0:06:08.196 to be the victim at least if I want him 0:06:08.196 --> 0:06:10.956 to file a report. If I'm not a victim, that 0:06:11.116 --> 0:06:13.436 I'm to blame for whatever a fake Michael Lewis has 0:06:13.476 --> 0:06:16.036 been doing at his fake address. He is the funny thing, 0:06:16.236 --> 0:06:19.076 I feel victimized not by whoever that guy dude was 0:06:19.116 --> 0:06:22.276 in Miami, but by city group. Like they present themselves 0:06:22.316 --> 0:06:26.396 as someone who has been victimized by essentially my inability 0:06:26.436 --> 0:06:29.636 to prevent anybody from stealing my identity. But really, if 0:06:29.676 --> 0:06:31.956 they'd never not done the dopey thing in the first place, 0:06:31.996 --> 0:06:33.956 we wouldn't even be here. And that's the thing that 0:06:34.436 --> 0:06:36.756 kind of gets under my skin, is that the financial 0:06:36.836 --> 0:06:39.116 sector has figured out a way to shift the burden 0:06:39.596 --> 0:06:42.796 of this problem onto people who have nothing to do 0:06:42.836 --> 0:06:46.036 with the problem. Let me get youse, right, dispatch one thirty. 0:06:46.956 --> 0:06:49.436 I've never had a case number. Can you put me 0:06:49.436 --> 0:06:51.356 on the board and generate numbers for a by thirty 0:06:51.396 --> 0:06:54.676 point five to nineteen? You know what all those numbers mean? 0:06:55.196 --> 0:06:57.516 Oh yeah, I'm talking through it. It's just like another language. 0:07:00.076 --> 0:07:05.116 Six zero one six. Definitely, thank you. I feel like 0:07:05.116 --> 0:07:07.596 I because this again. So I'm going to give you 0:07:07.596 --> 0:07:09.356 a business card with the case number, and I'm also 0:07:09.356 --> 0:07:11.476 going to give you a victim of identity the pamphlet. 0:07:11.756 --> 0:07:15.156 I already said this, but I'm the real Michael Lewis, 0:07:15.636 --> 0:07:18.996 and this is against the rules. A show about the 0:07:19.036 --> 0:07:22.196 decline of the human referee in American life and what 0:07:22.276 --> 0:07:29.876 that's doing to our idea of fairness. Here are the 0:07:29.916 --> 0:07:34.516 two most dangerous words in the English language consumer finance. 0:07:35.836 --> 0:07:37.836 The phrase now gets tossed around as if it's a 0:07:37.956 --> 0:07:40.676 natural part of human existence, like it's been around forever. 0:07:41.716 --> 0:07:44.396 But the first national credit cards didn't exist until Bank 0:07:44.396 --> 0:07:47.556 of America created them in the late nineteen sixties, and 0:07:47.596 --> 0:07:50.196 it wasn't until the mid nineteen seventies that City Group 0:07:50.236 --> 0:07:54.116 figured away around the usury laws. Laws that have existed 0:07:54.356 --> 0:07:57.836 since the first Babylonian dynasty that put limits on how 0:07:57.916 --> 0:08:01.316 much interest a lender could charge a borrower. In the 0:08:01.356 --> 0:08:03.956 mid seventies, the Supreme Court ruled that the laws that 0:08:03.996 --> 0:08:06.996 applied to lenders were the state laws where the lender 0:08:07.196 --> 0:08:11.116 was based, as opposed to where the loan occurred. In 0:08:11.156 --> 0:08:15.356 a desperate move to revive its economy, South Dakota got 0:08:15.436 --> 0:08:18.756 rid of the usury laws in nineteen seventy nine, which 0:08:18.796 --> 0:08:21.476 is why the City Group credit card I never applied 0:08:21.516 --> 0:08:25.876 for was issued from Sioux Falls, South Dakota. The original 0:08:25.876 --> 0:08:28.276 city Group credit card agreement back in the nineteen seventies 0:08:28.356 --> 0:08:31.156 ran a page and a half. The one I never 0:08:31.236 --> 0:08:34.636 signed was more than thirty pages of tiny print, And 0:08:34.716 --> 0:08:37.956 as you no doubt already know, it's a mine field 0:08:38.036 --> 0:08:42.556 of complicated fees and penalties. But it's not just credit 0:08:42.596 --> 0:08:45.876 cards now. It's all the Wall Street banks, the payday lenders, 0:08:45.876 --> 0:08:48.996 the subprime mortgage lenders, the car loan originators, the student 0:08:49.076 --> 0:08:53.476 loan services, and the vast shadowy network of companies supposedly 0:08:53.556 --> 0:08:58.796 keeping track of the credit worthiness of ordinary Americans. This 0:08:59.196 --> 0:09:01.996 is where trust and institutions has taken the biggest hit. 0:09:03.196 --> 0:09:05.636 When money people figured out how to inflict pain and 0:09:05.676 --> 0:09:10.036 suffering even on middle class white people without any consequence 0:09:10.076 --> 0:09:15.236 for themselves. How do they do this? That's easy. Consumer 0:09:15.236 --> 0:09:19.196 finance has had an incredible gift for remaining unrefereed, and 0:09:19.276 --> 0:09:21.316 the absence of a ref is what's allowed them to 0:09:21.316 --> 0:09:24.196 screw up the lives of millions and millions of ordinary 0:09:24.236 --> 0:09:31.236 people look super emotional today. So if I cry meet 0:09:31.356 --> 0:09:35.276 Katie Highland of New Rochelle, New York, public school teacher, 0:09:35.636 --> 0:09:39.396 mother of two small children, it's related to this too, 0:09:39.516 --> 0:09:44.516 which is interesting. This to which she refers is consumer finance. 0:09:45.156 --> 0:09:49.236 Some old student loans. Student loans started flowering in the 0:09:49.316 --> 0:09:51.836 nineteen eighties after the boom and credit cards and the 0:09:51.876 --> 0:09:55.876 effective death of usury laws. Just now, about forty four 0:09:55.916 --> 0:09:59.116 million Americans owe a total of one point five trillion 0:09:59.156 --> 0:10:02.916 dollars in student debt. More than four million of those Americans, 0:10:02.956 --> 0:10:06.196 most of them young people, are already in default. Some 0:10:06.316 --> 0:10:08.556 large number of the rest are heading towards it. And 0:10:08.636 --> 0:10:11.436 if you think they're just a bunch of deadbeats, we'll 0:10:11.476 --> 0:10:15.516 just hold that thought. Why do you want to introduce yourself? 0:10:15.996 --> 0:10:20.676 That's Audrey, my producer, act like a big girl. My 0:10:20.796 --> 0:10:25.556 name is Riley, And what's your name, Jackson? What do 0:10:25.596 --> 0:10:28.396 you usually do when you come home? Um, just go 0:10:28.516 --> 0:10:31.036 on a couch. But if I feel very sleep y'all, 0:10:31.076 --> 0:10:35.516 just follow asleep. But if we do falls you really 0:10:35.556 --> 0:10:39.556 like you'll so fast? Oh yeap is we can't follow 0:10:39.596 --> 0:10:43.436 asleep into and mommy can't start to work at night 0:10:43.476 --> 0:10:47.076 into like nine o'clock. What did she do at night? 0:10:47.116 --> 0:10:50.156 What type of work? Um? She just goes on a 0:10:50.236 --> 0:10:55.596 computer and maybe like sends emails and and actually sends, 0:10:55.756 --> 0:10:59.076 um what she does to work on her computer to 0:10:59.196 --> 0:11:04.196 school so her school can be running very good. That's Jackson, 0:11:04.436 --> 0:11:07.956 Katie's son. Katie teaches reading and writing to eighth graders 0:11:07.956 --> 0:11:11.316 in the Bronx and works with kids who struggle in school. 0:11:12.436 --> 0:11:16.116 Years ago, Katie got a bachelor's degree in English and 0:11:16.156 --> 0:11:19.116 then a master's in secondary education. So the loans I 0:11:19.436 --> 0:11:22.116 took out since day one. I graduated high school in 0:11:22.156 --> 0:11:23.836 two thousand and one, and I had to take loans 0:11:23.836 --> 0:11:26.756 out immediately. My mom raised three kids by herself, so 0:11:26.796 --> 0:11:30.036 we didn't have anything. So it was always understood that 0:11:30.076 --> 0:11:32.196 I was going to have student loans and I was 0:11:32.196 --> 0:11:34.596 going to have to pay them back, and so from 0:11:34.756 --> 0:11:37.716 day one that's what I did. Do you remember if 0:11:37.756 --> 0:11:40.236 you could take yourself back to that time, like, how 0:11:40.236 --> 0:11:42.556 did you think it was gonna go? Yeah, to play 0:11:42.556 --> 0:11:45.036 out like in the like being there and then thinking 0:11:45.076 --> 0:11:47.596 about the future. Yeah, I just thought, like, these are 0:11:47.636 --> 0:11:50.116 all adults, they have my best interested at a heart, 0:11:50.236 --> 0:11:52.876 and the people that are doing these things, who are 0:11:52.876 --> 0:11:56.796 associated with colleges and financial institutions, like They're going to 0:11:58.036 --> 0:11:59.756 tell me the thing that I'm supposed to do, and 0:11:59.796 --> 0:12:01.396 then when it comes time to pay it back, I'm 0:12:01.396 --> 0:12:02.716 going to have a job and I'm gonna have plenty 0:12:02.716 --> 0:12:05.556 of money and it's going to be easy. And you know, 0:12:05.836 --> 0:12:07.916 it was just something like, oh, yeah, everyone's student loans. 0:12:07.916 --> 0:12:12.516 It's annoying, but it's dual sort of thing. She doesn't 0:12:12.556 --> 0:12:14.996 recall anyone ever trying to explain to her how her 0:12:14.996 --> 0:12:18.316 loans worked. She just remembers the financial advisor at her 0:12:18.316 --> 0:12:21.156 college giving her some papers to sign and that was that. 0:12:22.036 --> 0:12:24.156 In the end, to pay for college and grad school, 0:12:24.356 --> 0:12:27.556 she took out several loans totaling seventy seven thousand dollars. 0:12:27.996 --> 0:12:30.916 The loans came from the US Department of Education, but 0:12:30.956 --> 0:12:33.516 the government farmed out the management of its student loans 0:12:33.516 --> 0:12:37.916 to the private sector. The consumer finance industry. The company 0:12:37.996 --> 0:12:42.876 advising her is called Naviant. When Katie has problems or questions, 0:12:43.396 --> 0:12:48.076 she needs to call Naviant. I realized that the amount 0:12:48.076 --> 0:12:51.076 of money that they expected me to pay every month 0:12:51.236 --> 0:12:53.916 wasn't going to be possible. That was when I first 0:12:53.956 --> 0:12:56.916 started like calling them and saying, listen, how do I 0:12:56.956 --> 0:13:00.196 get my payments lower? What do I do? You know, 0:13:00.276 --> 0:13:02.916 I'm a teacher. I only make such a such an 0:13:02.876 --> 0:13:05.436 amount of money, and you know, I don't really know 0:13:05.476 --> 0:13:07.596 how you guys expect me to pay this back with 0:13:07.636 --> 0:13:11.276 what I'm making. Every time I called it was a 0:13:11.276 --> 0:13:14.596 Fourbearian swords deferment or you know, oh, this is great, 0:13:14.676 --> 0:13:16.596 like you don't have to make payments for this amount 0:13:16.636 --> 0:13:20.916 of time, and sort of kept guiding me in that direction. 0:13:21.876 --> 0:13:25.116 In two thousand and seven, the United States Congress created 0:13:25.156 --> 0:13:28.956 the Public Service Loan Forgiveness Program for people who wanted 0:13:28.996 --> 0:13:31.516 to go into public service so they could afford to 0:13:31.516 --> 0:13:36.156 do it. Police officers, firefighters, soldiers, teachers. People who did 0:13:36.156 --> 0:13:38.676 those sort of jobs for ten years and made one 0:13:38.796 --> 0:13:41.796 hundred and twenty student loan payments on time could walk 0:13:41.796 --> 0:13:44.796 away from the rest of what they borrowed. It was 0:13:44.876 --> 0:13:47.036 just the sort of thing that a company like Naviant 0:13:47.116 --> 0:13:51.036 might alert borrowers too, but they didn't tell Katie. Katie 0:13:51.076 --> 0:13:53.716 heard about it on our own in two and fourteen 0:13:53.996 --> 0:13:57.636 from a fellow teacher. I kind of felt relief when 0:13:57.676 --> 0:14:01.916 I first found out about this one particular program because 0:14:02.196 --> 0:14:04.196 I was a great like I am a big believer 0:14:04.436 --> 0:14:08.196 of like the hard stuff will pass, and so for 0:14:08.276 --> 0:14:10.756 me that's what this was. It was like, Okay, this 0:14:10.796 --> 0:14:12.236 is gonna suck, Like you're not going to be able 0:14:12.276 --> 0:14:13.796 to go why you're not going to be able to 0:14:13.836 --> 0:14:15.596 have birthday parties for your kids or do this or 0:14:15.636 --> 0:14:18.116 do that. But in ten years, if you're in this plan, 0:14:18.276 --> 0:14:20.436 like it'll be worth it at the end because it'll 0:14:20.476 --> 0:14:22.876 be gone and then you can just like really put 0:14:22.916 --> 0:14:25.236 your time and your money into, you know, the things 0:14:25.236 --> 0:14:26.916 that you want to do for your family and your kids. 0:14:27.516 --> 0:14:31.876 And so she called Navigant again. That's where the trouble 0:14:32.076 --> 0:14:35.476 really began, when she called the company that was paid 0:14:35.556 --> 0:14:38.996 to help her understand her situation to ask them for help. 0:14:39.636 --> 0:14:41.516 I was getting all the paperwork filled out for the 0:14:41.516 --> 0:14:44.476 public service loan forgiveness, and I remember, like I have 0:14:44.636 --> 0:14:46.636 going back and forth, like faxing and they'd be like, 0:14:46.636 --> 0:14:47.876 oh no, the data is wrong and you have to 0:14:47.876 --> 0:14:49.836 fill it out again, and I would fax it again 0:14:49.836 --> 0:14:52.116 and oh no, this was in a different format. You 0:14:52.196 --> 0:14:54.476 have to fax it again. It was the same way 0:14:54.516 --> 0:14:56.356 I felt when I was trying to get Experience or 0:14:56.396 --> 0:14:58.956 city group or whoever to explain what they've done to 0:14:58.996 --> 0:15:02.236 my credit, the whole music, the phony, thank you for 0:15:02.276 --> 0:15:05.676 your patience, the deep mystery of the exact location of 0:15:05.716 --> 0:15:07.636 the person who finally comes on the other end of 0:15:07.636 --> 0:15:11.156 the line, the total inability of anyone to solve anything. 0:15:12.076 --> 0:15:14.316 And they said that I you know, no one was 0:15:14.356 --> 0:15:19.316 eligible until two thousand and seventeen, because at that point 0:15:19.356 --> 0:15:21.596 it would have been ten years from the when the 0:15:21.596 --> 0:15:24.836 program started. By twenty seventeen, she'd have spent ten years 0:15:24.836 --> 0:15:26.956 as a teacher and made one hundred and twenty on 0:15:27.116 --> 0:15:30.236 time payments. What remained of her loans would then be 0:15:30.516 --> 0:15:33.276 entirely forgiven. And I said, to my mom's say, this 0:15:33.316 --> 0:15:35.756 is going to be amazing. What a relief like if 0:15:35.796 --> 0:15:38.796 this happens, like I'll be able to save and maybe 0:15:38.796 --> 0:15:41.276 one day by a house or whatever. And I remember 0:15:41.316 --> 0:15:43.836 calling back in the end of two thousand and sixteen 0:15:43.956 --> 0:15:46.196 to make sure that things were ready for the beginning 0:15:46.236 --> 0:15:50.076 of two thousand and seventeen and them telling me that no, 0:15:50.676 --> 0:15:55.596 you're not eligible. You were never eligible and basically, if 0:15:55.596 --> 0:15:59.436 you want to become eligible, you have to consolidate your 0:15:59.476 --> 0:16:03.796 loans and you have to start from scratch, starting now 0:16:03.956 --> 0:16:06.476 at ten years. And I was like, well, wait a minute. 0:16:06.876 --> 0:16:09.356 Katie Hyland asked Navigant to go back and listen into 0:16:09.356 --> 0:16:12.676 phone records of all her previous calls, all those conversations 0:16:12.716 --> 0:16:17.876 about faxing and paperwork and waiting until twenty seventeen. They 0:16:18.116 --> 0:16:20.756 said that they did, and they and then they called 0:16:20.796 --> 0:16:24.116 me back and said, we never heard any instances on 0:16:24.196 --> 0:16:27.316 the phone records of you asking anything about public service 0:16:27.356 --> 0:16:32.156 loan forgiveness. And I was like, well, that's an outright lie. 0:16:32.756 --> 0:16:44.796 Oh that familiar feeling. If you want to track Katie 0:16:44.836 --> 0:16:48.116 Highland's misery to its source, you need to travel to 0:16:48.156 --> 0:16:51.396 Wilkes Barry, Pennsylvania, or at least call someone who knows 0:16:51.436 --> 0:16:55.196 the place. It's the type of place that you grow 0:16:55.316 --> 0:16:59.156 up in and your whole family is there, and chances 0:16:59.156 --> 0:17:01.036 are you settled down and you stay there for the 0:17:01.036 --> 0:17:04.116 rest of your life. Lynn Sabolski grew up in Wilkes Barry. 0:17:04.716 --> 0:17:10.076 For employment, it is an economically depressed area and so 0:17:10.356 --> 0:17:13.916 employers like Navy and major employers or the area are 0:17:13.996 --> 0:17:18.516 really important in terms of upholding the local economy. Lynn's 0:17:18.556 --> 0:17:21.716 been in the student loan industry for fifteen years. Until 0:17:21.796 --> 0:17:23.836 last year. She worked in the Naviant call center in 0:17:23.916 --> 0:17:28.756 Wilkes Barry, the place Katie Hiland called for help to 0:17:28.756 --> 0:17:31.396 take advantage of the program Congress had created for people 0:17:31.436 --> 0:17:34.676 like her, the program to make the student debt of 0:17:34.796 --> 0:17:38.436 public servants bearable. Your team is handling calls that are 0:17:38.436 --> 0:17:40.476 coming in from people who have student loans that they're 0:17:40.476 --> 0:17:43.836 dealing with correct and so what were the pressures on 0:17:43.876 --> 0:17:48.516 you that bothered you. The biggest pressure that was on 0:17:48.556 --> 0:17:52.396 me was the seven minute rule, and that was representatives 0:17:52.396 --> 0:17:55.596 were told to keep their phone calls to no more 0:17:55.636 --> 0:17:59.876 than seven minutes. Also within those requirements were that you 0:18:00.396 --> 0:18:04.716 validate the caller's identity, that you validate their contact information, 0:18:04.836 --> 0:18:09.476 that you read a script to proving use of their 0:18:09.516 --> 0:18:12.716 telephone and their text messaging. And so by the time 0:18:12.756 --> 0:18:15.516 you know you had to mention autodebit, you had to 0:18:15.556 --> 0:18:18.876 mention the company website and all of this eats away 0:18:19.156 --> 0:18:23.476 at the seven minutes that you're given, yes call, running 0:18:23.476 --> 0:18:25.436 out the clock that the basketball it used to be 0:18:25.476 --> 0:18:27.636 known as the four Corners office, right right before they 0:18:27.636 --> 0:18:29.596 put it, before they put in the shot clock. So 0:18:29.876 --> 0:18:34.196 so what what and if you win over seven minutes? 0:18:34.236 --> 0:18:36.396 What would happen here? I should say for the record 0:18:36.556 --> 0:18:39.956 that a Naviant representative wrote to us. The company said 0:18:39.996 --> 0:18:44.596 that quote, while Naviant, like other customer service oriented companies, 0:18:45.036 --> 0:18:48.356 measures call times, we do not set any time limits 0:18:48.396 --> 0:18:51.476 for calls. Lynn Sabolski got a different message at her 0:18:51.516 --> 0:18:54.516 call center. The reps were put in a position where 0:18:55.276 --> 0:18:59.596 they couldn't give the barrowers the information that really needed 0:18:59.636 --> 0:19:03.596 to be quick given. And so what some of the 0:19:03.676 --> 0:19:07.716 representatives started doing. We're looking for ways to you know, 0:19:07.836 --> 0:19:11.756 get their calls under of the representatives would pretend that 0:19:11.796 --> 0:19:15.036 the call had disconnected. They would, you know, accidentally on purpose, 0:19:15.116 --> 0:19:18.356 hang up on a barrower because that barrower needed to 0:19:18.356 --> 0:19:21.796 talk about an income based repayment option and it's a 0:19:21.836 --> 0:19:24.476 long application in the barrowe has too many questions and 0:19:24.556 --> 0:19:26.516 somebody's looking at their watch going, hey, I got to 0:19:26.596 --> 0:19:29.596 keep this under seven minutes, or you know, the kids 0:19:29.636 --> 0:19:32.596 aren't going to have dinner. Lind Sabolski was never on 0:19:32.636 --> 0:19:34.516 the phone with Katie Hiland, at least not that we 0:19:34.596 --> 0:19:37.156 know of, but she knows pretty well what happened to her. 0:19:37.796 --> 0:19:40.396 Naviant was meant to be advising people with student loans 0:19:40.436 --> 0:19:43.636 on behalf of the Department of Education, but the Department 0:19:43.636 --> 0:19:48.396 of Education pays Naviant a fee for every account they manage. 0:19:48.876 --> 0:19:51.156 The less time they spend on each account, the less 0:19:51.156 --> 0:19:54.356 it costs them to manage that account. The seven minute 0:19:54.436 --> 0:19:57.756 rule is there just to maximize profit per customer. We 0:19:57.876 --> 0:20:00.756 could see throughout the day how far we were out 0:20:00.796 --> 0:20:04.716 of standard is what it would be called. So for example, 0:20:04.716 --> 0:20:06.836 I had a display on my computer that would show 0:20:06.876 --> 0:20:09.836 me at any given moment if I was red, yellow, 0:20:09.956 --> 0:20:12.236 or green in terms of, you know, how my numbers 0:20:12.236 --> 0:20:15.236 were holding up. And then if you kept your phone 0:20:15.236 --> 0:20:18.436 calls to seven minutes or under, you got a bonus. 0:20:18.516 --> 0:20:20.956 And that could be a few hundred dollars in an 0:20:20.956 --> 0:20:24.756 economically depressed area. That's the difference between you know, paying 0:20:24.756 --> 0:20:28.516 your groceries or your car payment or not. You got 0:20:28.556 --> 0:20:31.996 that right. The customer service reps for student loans have 0:20:32.036 --> 0:20:35.356 their own consumer financial problems which they can only solve 0:20:35.396 --> 0:20:38.996 if they ignore yours. You know, there's this thing called empathy. 0:20:39.116 --> 0:20:41.396 You know, if you're calling me because you're in distress, 0:20:41.476 --> 0:20:44.156 because your finances are a mess and you need help, 0:20:44.156 --> 0:20:47.316 and you're talking to somebody who is dependent on making 0:20:47.316 --> 0:20:50.316 this call a seven minute thing because their finances are 0:20:50.356 --> 0:20:53.396 not that great and they're not in a position, you know, 0:20:53.476 --> 0:20:56.876 to get something better than you know, it feels doubly 0:20:56.916 --> 0:21:00.516 deceptive because you know that you're kind of in the 0:21:00.556 --> 0:21:08.996 same shoes. Here's the reality of consumer finance. A town 0:21:09.156 --> 0:21:12.916 of people highly dependent on a student loan servicing firm 0:21:14.076 --> 0:21:16.316 is being put to work finding ways to screw the 0:21:16.396 --> 0:21:20.556 equally desperate people who've taken out the loans, to do 0:21:20.676 --> 0:21:23.276 things like make it extremely difficult for a teacher to 0:21:23.276 --> 0:21:27.076 opt into the program Congress had created specifically to reward 0:21:27.116 --> 0:21:30.516 people like her. But if Naviant allowed Katie Highland to 0:21:30.596 --> 0:21:33.196 enter the program, her account would be taken away from 0:21:33.236 --> 0:21:39.036 Naviant and Naviant would lose revenue. Katie Highland wasn't Naviant's client, 0:21:39.516 --> 0:21:44.396 she was its crop. The CEO of Naviant is named 0:21:44.476 --> 0:21:48.476 Jack Ramondi. In twenty seventeen, he was paid six and 0:21:48.476 --> 0:21:52.116 a half million dollars. We asked to interview him or 0:21:52.156 --> 0:21:54.756 some spokesperson in Navian, but they didn't want to talk. 0:21:55.436 --> 0:21:57.436 But let's leave that to one side for a moment. 0:21:58.116 --> 0:22:02.516 Let's consider this business of student loans, servicing, the behavior 0:22:02.556 --> 0:22:07.356 it encourages, the spirit in which it operates. Naviant isn't 0:22:07.396 --> 0:22:10.996 some little pissant fly by night. It's listed on the 0:22:11.076 --> 0:22:14.316 Nasdaq Stock Exchange as a market cap of nearly three 0:22:14.356 --> 0:22:18.796 billion dollars. It services three hundred billion dollars in student loans. 0:22:19.396 --> 0:22:24.156 It's the heart of consumer finance. So a manager came 0:22:24.156 --> 0:22:26.156 over me while I was on the phone discussing an 0:22:26.196 --> 0:22:29.716 income based repayment plan with a barrower, and they said, 0:22:30.476 --> 0:22:34.396