Unscrupulous Bill Collectors Illegally Freeze Seniors’ Social Security

[Omaha Steve]

http://blog.aflcio.org/2007/12/03/unscrupulous-bill-collectors-illegally-freeze-seniors-social-security/

Once again, the Alliance for Retired Americans has a great item in its weekly newsletter we want to share with you.



While Big Banks get bailouts, seniors and the disabled are being robbed of their Social Security—which has expressly been exempt from attachment by bill collectors.

According to a recent article in Yahoo! Finance, more and more seniors and people with disabilities are having their accounts frozen by bill collectors.…The freezes can leave seniors without access to their accounts for months at a time. Even in the best cases when the bank and creditors agree a mistake was made, it may still take weeks to fix the error. Additionally, some banks are profiting from non-refundable fees of $100 to $150 for freezing accounts, as well as overdraft charges when consumers, unaware of the hold, pay bills. The problem continues to grow with increasing consumer debt, and new technology making seizing bank accounts simpler and cheaper than ever before. In September, the Senate Finance Committee held hearings on the issue, and is investigating the extent of this problem.

According to the Laura Rowley column on Yahoo! some seniors are going hungry or without their needed medicines for months at a time because it is so difficult to unfreeze their accounts. One 74-year-old grandmother discovered her bank account was frozen after her rent check bounced shortly after her Social Security check had been direct deposited. Capital One had won a judgment against her and had her account frozen for a $4,000 credit debt she had been trying to pay off for four years. They wanted to know what’s in her wallet.

FULL story at link.

[Richard Steele]

1. Grrrecommended.

[grasswire]

2. do you know what act expressly prohibits bill collectors...

...from attaching SS? I'd like to know that, if you have any info. The article doesn't say.

[ben_meyers]

4. They aren't attaching SS

But going after bank accounts where it has been deposited. Might be an argument against direct deposit.

[aquart]

5. A strong argument.

[grasswire]

13. oh, okay

Simple remedy: cash the check and put the dough under the mattress.

[Parche]

3. Capital One

They can kiss my A$$ they are the worst, I would never get anything with them....:hi:

[Adelante]

6. This is the kind of bullshit the Banking Reform act let loose

It repealed the New Deal era Glass-Steagall Acts that protected consumers from exactly something like this. We have to regain Glass-Steagall is what we have to do.

Front Line did an excellent documentary on this:

http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html

[Bitwit1234]

7. It is against the law for a bank to do that. And they

know better but the go ahead and do it...I think they should start filing law suits against the banks for illegal practice. I heard about this six months or so ago.

The only people who can take social security is the government for taxes, I am pretty sure.

[truedelphi]

8. It is quite possible that you are smarter than I am but I spent

Three days of my life trying to figure out how to hit my bank with such a lawsuit - and finally

I gave up. (And I am not a quitter when it comes to lawsuits - representing myself against an evil duo recently, I won when fifteen attorneys told me I would lose.)

First of all - you have to know whether your bank is federally or state chartered.

Then you would find out that even if the bank is for instance, federally chartered, there are still provisions inside the banking act that allow the bank to use state legislation rather than the federal regs.

How you even find out I couldn't tell you - it is the most complex legislation enacted.

And any time there are questions of whether a situation is handled by the Feds or by the state - you are creating a legal impasse.

If you have the case tried in the Federal court system, and then it turns out that it should have been tried in the state system, you will have your case thrown out and vice versa.

So you will be out all the money and time invested in the case.

[truedelphi]

9. Oh and one other thing, the Feds can take your Soc Sec

For any and all student loan monies owed.

[NMMNG]

10. Infuriating

:grr:

[wellstone dem]

11. this is what happens

A creditor gets a judgement.
They garnish the bank account.
The bank freezes the bank account.
The debtor receives notice.
The debtor has to fill out a paper claiming the bank account is exempt because the proceeds are social security.
The creditor asks for proof.
The debtor provides proof.
The creditor notifies the bank to release the funds.
The debtor now has to pay all kinds of fees for bounced checks.
Six month later, repeat all of above steps.

In a few cases you can insert the line

"debtor contacts legal aid who, if they have staff, will review the process, sue collection agencies acting illegally and address the problem." Unfortunately in most cases legal aid offices do not have the staff to adequately review all these cases.

The safest thing to do is to advise people on Social Security, SSI, or otherwise protected from garnishment to keep money out of banks. Unfortunately, this leaves the most vulnerable, even more vulnerable to theft or loss.

[Joanne98]

12. I hate their guts!