Student Loan Servicer Nelnet Settles Call Recording Class Action

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On Monday, a California federal judge granted preliminary approval to a class action settlement that will put an end to allegations student loan servicer Nelnet Servicing LLC illegally recorded telephone calls without notifying the recipient.

The Nelnet class action lawsuit was initially filed by plaintiff Than Zaw, who claimed that Nelnet called him regarding a family member’s debt. Zaw alleges Nelnet recorded the telephone calls without notifying him. Further, he claims he never provided consent to having phone calls recorded by Nelnet. The call recording class action lawsuit asserts claims under California’s Invasion of Privacy Law.

Nelnet denies any wrongdoing, but agreed to pay nearly $1.2 million to settle the call recording class action lawsuit and avoid the risk and expense of ongoing litigation. The class action settlement funds will be distributed to eligible Class Members on a pro rata basis. According to court documents, there are approximately 104,122 potential Class Members.

U.S. District Judge Richard Seeborg ultimately granted preliminary approval to the agreement despite concerns that the claims release may be overly broad. Under the terms of the Nelnet class action settlement, Class Members are limited to anyone who received calls from Nelnet between Dec. 18, 2011 through the date of preliminary approval. However, the claims release is not subject to the same limitation.

“Both parties represented to the court that the release is not intended to encompass claims beyond the scope of the complaint,” the judge acknowledged. “Nevertheless, the italicized portion of the release could fairly be read to encompass a release of any claims a Class Member might possess arising from defendant’s recording or monitoring of calls either before or after the Class Period. In other words, the plain language of the release is not limited to ‘the Released Parties’ recording and/or monitoring of calls during the class period.’”

Despite his concerns, Judge Seeborg found that the proposed call recording class action settlement “falls within the range of possible approval” and met the criteria to justify preliminary approval. He cautioned the parties to be prepared to address the issue of the claims release at the Final Fairness Hearing, which has been scheduled for Nov. 13, 2014.

“With that caution in mind, and good cause appearing, the parties’ motion to certify a provisional class and for preliminary approval of the class action settlement is granted,” Judge Seeborg said.

More information about how to file a claim for the Nelnet call recording class action settlement was not immediately available. Keep checking TopClassActions.com or sign up for our free newsletter for the latest updates. You can also mark this article as a “Favorite” using your free Top Class Actions account to receive notifications when this article is updated.

Zaw is represented by Joshua B. Swigart of Hyde & Swigart and Abbas Kazerounian of Kazerouni Law Group APC.

The Nelnet Call Recording Class Action Lawsuit is Than Zaw v. Nelnet Business Solutions Inc., et al., Case No. 3:13-cv-05788, in the U.S. District Court for the Northern District of California.

UPDATE: Instructions on how to file a claim for the Nelnet call recording class action settlement are now available! Click here or visit http://www.zawcallrecordingsettlement.com/ for details.

UPDATE 2: Nelnet class action settlement checks worth about $422 were reportedly mailed on Dec. 24. Congratulations to our viewers who filed claims and got paid!