A recent New York Times article, “As Paperwork Goes Missing, Private Student Loan Debt May be Wiped Away”, reported on National Collegiate, one of the largest owners of private debt, which lost potentially $5 billion in student loans due to missing paperwork. While the students may be relieved, the lenders are certainly distressed because document scanning and indexing could have prevented their losses. The article noted that tens of thousands of people who took out private loans to pay for college — but have overdue payments — may get their debts wiped out. Judges around the country have dismissed dozens of delinquent borrower lawsuits because the loan holders can’t produce the paperwork to prove the person owns the debt. Recent cases in New Hampshire, Ohio and Texas have tossed out lawsuits by National Collegiate, ruling that it could not prove that the person named in the lawsuit owned the debt on which it was trying to collect.
How could this happen? Typically, loans, specifically student loans, are bought and sold among lenders all the time, changing hands among other investors and banks. A hard copy of these loans being passed from lender to lender increases the risk of losing important accompanying paperwork. In these cases, when the lawsuit is brought to court, the lender doesn’t have a paper trail to prove the loan’s ownership, so the debt collection can’t be enforced. Lenders are forgiving billions of dollars in debt just because they couldn’t produce the paperwork to prove the loan’s ownership. A random sample of 400 National Collegiate loans discovered that there wasn’t one loan that had assignment paperwork documenting the chain of ownership.
So what can your company do to avoid such costly mistakes?
The best defense is a good offense. Proactivity instead of a passive attitude is the key to ensure success. In the case of missing paperwork, your business can eliminate the paper so it can’t go missing. Start seriously considering going digital with your organization’s important paper work by using document scanning and indexing services like those from Konica Minolta. Not only are you keeping documents safe and secure from fire and flood damage, but you also eliminate a time consuming search effort – documents can be found instantly using a customer’s name, ID or even keywords. While using document scanning and indexing eliminate lost and/or missing paperwork, it also has many other benefits to revel in:
With Konica Minolta’s document scanning and conversion services, we can eliminate the hassle of maintaining paper filing systems by scanning and creating digital images of every document. Additionally, we can index documents using your criteria of choice, allowing you to search and instantly retrieve the document you’re looking for. It’s not only your typical 8 ½ x 11 that can be scanned and indexed; we have the expertise to scan and digitize any kind of document, even large format engineering drawing and microfilm/microfiche.
If you’ve been procrastinating on going digital, now is the time to start. The costs of going paperless are actually miniscule compared to the potential consequences of staying with hard copy. The risks stated here are just some of the situations that could happen to organizations that don’t take the first step in going paperless. As with everything else, the hardest step is the first step toward change. Organizations worldwide who have taken this step have seen their operations transformed.