FORBEARANCE WITHOUT PERMISSION — Why Your Bank’s “Pause” May Be Harming Your Credit
If You Didn’t Ask for Loan Forbearance But It Damaged Your Credit, R23 Law’s California Consumer Protection Attorneys Can Step In
When “Relief” Isn’t Voluntary—or Helpful
During the COVID-19 crisis, many banks and lenders rolled out loan forbearance programs to ease the financial burden on borrowers. But in an effort to move quickly, some institutions automatically enrolled borrowers in these programs—without their permission.
While forbearance can offer breathing room in tough times, unauthorized forbearance can also quietly sabotage your credit. If your loan servicer paused your payments without asking, and now your credit report has taken a hit, you may have legal options to fight back.
What Is Unauthorized Loan Forbearance?
Loan forbearance typically allows borrowers to pause payments temporarily—often for several months. During that time, interest may continue to accrue unless specific relief programs say otherwise.
The problem? Some banks and lenders:
Enrolled borrowers without consent
Stopped automatic payments without notice
Reported the loan status as “deferred”, damaging credit reports
This kind of action can leave borrowers with lower credit scores, missed payment history, and even legal risk, especially if bankruptcy or court orders are involved.
Case Study: When “Deferred” Means Damaged
🔹 Great Lakes Student Loans
Great Lakes, a major student loan servicer, placed borrowers into automatic forbearance during the federal COVID-19 relief rollout. One borrower saw her credit score drop 44 points overnight after deferments were reported—despite having no late payments.
The credit report now reflected “deferred” status rather than “paid as agreed,” which significantly impacted her ability to secure credit—even though she never asked for forbearance in the first place.
🔹 Wells Fargo Mortgages
Wells Fargo faced public scrutiny for putting homeowners into forbearance without consent. In one case, Troy Harlow—who had been making on-time payments during a bankruptcy proceeding—discovered Wells Fargo had reported a forbearance he never authorized. This jeopardized his entire bankruptcy repayment plan and created serious legal consequences.
The Hidden Credit Score Impact
Even if you didn’t request forbearance:
Your credit score may drop if payments stop reporting as "on time"
The “deferred” label may suggest you were struggling financially
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For many, this damage is done without any warning, and the burden to fix it falls on the borrower.
Your Legal Rights After Unauthorized Forbearance
Under the Fair Credit Reporting Act (FCRA) and other consumer protection laws, you have the right to:
Be notified about any changes to your loan terms
Dispute inaccurate or misleading credit reporting
Seek damages if a lender’s actions harmed your credit without consent
R23 Law’s California Consumer Protection Attorneys specialize in holding banks, loan servicers, and credit reporting agencies accountable for this kind of harm.
R23 Law’s Expertise in Unauthorized Forbearance Claims
If your bank or loan servicer placed your loan into forbearance without your approval, and you suffered credit damage or financial setbacks as a result, you may be eligible for:
Credit report corrections
Compensation for emotional distress or financial loss
Legal damages under federal and California law
Restoration of your credit standing
We don’t just write letters. We file claims, litigate, and fight for meaningful results—so you can move forward with your financial life.
Don’t Let a Bank’s “Shortcut” Derail Your Credit
You have every right to manage your loan on your own terms. If a forbearance was placed on your account without your consent—and you’re seeing the consequences now—it’s time to talk to R23 Law’s Consumer Protection Attorneys.
Contact R23 Law for a Free Case Evaluation
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