Collection agency to return $475K after suit alleged it unlawfully garnished wages in WA
A collection agency accused of unlawfully garnishing wages will return $475,000 to Washingtonians, the state Attorney General’s Office said Tuesday.
People affected won’t have to contact the state to get that restitution. The Attorney General’s Office will mail checks.
Money will be returned to up to 5,000 people, and hundreds of others will have $250,000 in fees forgiven. The number of people affected hasn’t been finalized, the AG’s Office said.
Attorney General Bob Ferguson sued the agency, Machol & Johannes, in King County Superior Court last year. The lawsuit alleged the company violated Washington’s Consumer Protection Act and Collection Agency Act.
“Washingtonians who owe debts have rights — debt collectors aren’t allowed to take every penny you have,” Ferguson said in a news release. “Debt collectors must follow the law. This resolution will make Washingtonians whole, and assures that Machol & Johannes will play by the rules.”
The Attorney General’s Office gave this account of what happened:
It filed the lawsuit after a King County Superior Court judge noticed the Colorado-based collection agency’s improper filings.
“Between 2015 and at least April 2019, Machol & Johannes violated the garnishment law by engaging in a pattern or practice of submitting sworn declarations to Washington courts falsely stating that the required evidence of mailing to the consumer was attached to the declaration when it was not,” the lawsuit said in part.
It also turned out the agency didn’t have the proper license for more than a year in 2011 and 2012, and that it charged people fees when it didn’t collect funds — even though fees are only allowed when a debt collector actually manages to collect money.
Additionally, the agency didn’t properly notify people that they can protect some of their funds from being garnished. Recent laws passed in Washington state let consumers exempt up to $2,000, half automatically and half by checking a box on a form collection agencies have to provide.
“The company also is required to return money collected from one Washington consumer who received a garnishment notice during the garnishment moratorium that was put into effect due to the COVID-19 pandemic emergency,” the Attorney General’s Office press release said.
The consent decree the parties signed Monday to resolve the lawsuit says in part that the agreement “shall not be construed in any way as an admission of law, fact, liability or misconduct,” and that the “defendants expressly deny the claims, allegations or causes of action that were or could have been asserted by the state.”
In addition to the other restitution and relief, the company will pay $414,000 to the Attorney General’s Office for its investigation.
