Debt Collector Garnishes Woman’s Wages But Won’t Tell Her Exactly How Much She Owes

A woman in New Jersey fully admits that her financial irresponsibility led her to owe Capital One $1,286, an amount that eventually ended up in collections. But now that the same woman wants to get a better handle on how much she’s paying out every month, the collections agency refuses to give her an accurate account balance.

When her account was first sold to the collections agency in January, the woman arranged to pay $100 every month to pay down the debt. Those payments were made via money order to a court clerk.

Then in March, the agency started garnishing the woman’s wages — $169 every two weeks — in addition to her monthly payments.

Between those two forms of payment, the agency should have collected the full amount by now, right?

On her pay stubs every two weeks, it listed the amount garnished and the amount remaining to be paid, but the woman quickly realized that the math didn’t add up.

She contacted the agency, and says she was there was no record of either the garnishments or the payments to the court clerk.

“I told her that her company was already being paid twice and that all I wanted at this point was a statement… showing payments made and the balance due,” she tells the Newark Star-Ledger’s Bamboozled column.

And while the rep would not tell her the account balance, she did ask the woman if she’d like to pay it off.

She tried talking to the court about it but was just pointed right back in the direction of the collections agency.

In early May, the woman’s pay stub said she still owed $457 in garnishments, though the woman calculated she had paid out all but $21 on the amount by that point.

When Bamboozled contacted the agency, they were told no account information could be given because the debt — which by this point should have been fully paid off — was about to be sold to another agency.

Not that it had been sold, but that it was about to be sold in the coming weeks. It was if the woman’s debt was physically packed up in a cardboard box and sitting on a warehouse dock and no one could be bothered to open it up.

The court officer who accepts the woman’s $100 payments was able to clear up some of the mystery.

Apparently, while he accepts and tracks the payments he gets from the woman, another court officer is responsible to tracking the garnishments. The two officers file separate reports to the agency, which is supposed to total them and make sure there is no overpayment.

After chatting with the other court officer, the one who spoke to Bamboozled said the woman “should not remit any additional payment to our office… If there’s an overpayment, the court officer (handling the garnishments) will have to arrange for a refund.”

So isn’t the collections agency legally responsible for providing an accurate account statement to the woman?

Apparently, under New Jersey law, no.

The FTC tells Bamboozled that regulations specific to a debt collector’s responsibility to update a debtor’s balance are left to each state to decide. And no such regulation exists in the Garden State.

Capital One says it will look into the woman’s case.

Bamboozled: Debt collector wasn’t keeping track of payments and, surprisingly, state law doesn’t require it [NJ.com]

Thanks to Sami for the tip!

Comments

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  1. RandomLetters says:

    I see the mafia has added debt collecting to their financial business ventures.

    • iesika says:

      That’s not exactly new. At least no one’s shown up at her place with a baseball bat, yet.

  2. The Cupcake Nazi says:

    There’s no way this isn’t illegal in SOME way…the idea that it can be OK to collect money willy-nilly and not be responsible for properly tracking it or providing statements to the payer on demand is ludicrous. Especially when they’re being allowed to take that money by force (garnishment).

    • crispyduck13 says:

      That’s the part I really don’t get. If these companies are going to involve the judicial system and take wage garnishments then how is said judicial system not somehow aware of the debt they are collecting for the collector? They should require monthly statements from the debt collector so they know where they are sending money and when to stop. Otherwise these companies are effectively free to use the courts to steal money.

      • StarKillerX says:

        That’s has me scratching my head as well, as does why she is required to make payments to the court clerk and is also having her wages garnished. I would expect it to be one or the other and not both, and in fact I wouldn’t think the court would approve garishment as long as she kept up on her payments to them.

        • Lt. Coke says:

          Wait a minute. You didn’t blame her for giving them money on top of the garnishments. You didn’t accuse the victim of lying. You didn’t note the planted positive reviews for “many” collections agencies. You didn’t “find anything suspicious” about this story…

          Did you forget your meds today or somethin’?

      • Loias supports harsher punishments against corporations says:

        They likely have to show documents to the court to receive a garnishment order. After that, the employer and court has a recorded history of deductions make on the payroll and payments made to the court, respectively.

    • ShruggingGalt says:

      Sometimes.

      I’ve been in a payroll department where a garnishment came in. The garnishment order was very specific – $XXX per paycheck until $xxxx paid.

      Collection agency called me up after I stopped garnishing, told me I was in violation of the court order because the interest that had been accumulating on the debt wasn’t paid.

      After yelling at me that I followed the official court order (which said interest accrued but didn’t account for it on the total amount to be garnished!), and called the court officer to determine that I had done everything right, I told them to take it up with the court.

      Never heard back from them. I think they screwed up by not calculating the interest in the total and as such were out of luck.

      • Loias supports harsher punishments against corporations says:

        I often get notes on garnishments saying to contact the garnishor when the balance is nearly paid, to catch interest accrued.

        It’s generally in the employee’s best interest (pun intended) to just tack that on, since the alternative is to make the garnishor apply for a new garnishment, which adds fees and interest again.

      • carlathecommander says:

        I will only go up to the amount on the court docs. If it isn’t correct, that isn’t my problem. What ground would I have to stand on with my employee if I garnished more? They’ve tried to tell me I didn’t take enough and I tell them to pound sand and get another garnishment if they want more. They’ve never come back to me with one.

  3. crispyduck13 says:

    Scum of the Earth. Sure people should pay their bills and keep up on their finances, but it seems like debt collectors go out of their way to be as horrible and unethical as possible.

    • Kate says:

      What’s scum are the people who don’t think agencies like this should be regulated and a strong government to keep control over them.

      • Velkyr says:

        My view is this:

        If it’s a new industry: Allow them to govern themselves, but look at them closely to see if minimum regulations need to be put in place to widespread protection.

        Established Industry in “good standing” with consumers (Not widely despised): Keep regulation to a minimum.

        Established Industry that has abused the lack of regulations: Regulate them with a heavy hand. After a decade, slowly ease up from the regulations, starting with the least important of those regulations. If they play well, ease up a little more. However, as they have a history of abuse, keep minimal regulations, and keep a heavy watch on them to ensure there won’t be a relapse in their abusive behaviour.

        That, personally, to me is how regulation should be done. Banks, credit agencies, telco’s/ISP’s, and energy should all be highly regulated.

        • voogru says:

          Yeah well you see the problem is the regulators become industry insiders. Regulatory capture.

          Look it up.

          It always happens.

          It can’t be prevented.

          • Inglix_the_Mad says:

            actually, especially in high value industries it can. Use the “shark” concept:

            Everytime some catches malfeasance they get a percentage of the malfeasance and find as a bonus. You want them to be sharks, eating voraciously. A “good” regulator would be wealthy enough to not give a crap after “retiring.”

        • T-Bone says:

          Debt Collection is not a new industry. A quick Google brought up its beginnings in the 1700s and regulation starting in the 1850s.

  4. El_Cheapocabra says:

    In my limited checking on debt collection agencies in my area (they’re always posting jobs), it seems they are all run by lawyers, as side businesses to their law firms.

    Nah, they would never manipulate the law for their own gain. /s

    • crispyduck13 says:

      Nah, they would never manipulate the law for their own gain.

      Or add on mysterious charges, interest and fees while you are paying off a debt. No way, those guys are straight shooters.

  5. AllanG54 says:

    Firstly, in NJ in order to have one’s wages garnished the company must get a judgment against you. Second, it’s not always possible to give an exact balance as there are court fees, marshal fees (marshal gets 5% of the judgment amount) and judgment fees plus applicable interest included pre and post judgment. The one who has it would be the marshal or in this case court officer who has the balance. I did legal collections for 14 years and I wasn’t able to give someone an exact balance either. The only way I could do it was by contacting the marshal’s office.

    • who? says:

      So why isn’t the debt collector contacting the marshal’s office to get the information for her?

      There is no reason that they shouldn’t be able to tell her how much she owes, unless they’re trying to swindle her. Especially since she’s so close to having it paid off.

  6. Jawaka says:

    I’m sorry but I find it hard to fell sorry for someone who only wants fair and accurate accounting when its beneficial to her. All collection agencies are scum and deceptive. the best way to deal with them is to not have an account passed to one in the first place.

  7. Loias supports harsher punishments against corporations says:

    As a person who routinely processes and handles garnishments, I official call Shenanigans on this story.

    First, her calculated balance of $21 remaining and their of $457 remaining makes perfect sense. She is not calculating the fees and interest racked up when you are being garnished Interest is accrued during repayment, and fees for processing the garnishment summons, servings, etc. are tacked on and owed by the debtor.

    She shouldn’t be calling the debt collector, she should be calling her employer. The employer has a document from the court stating the initial balance, amount already paid off, fees, interest accrued to that date, and interest rate accruing. A copy of this document was required to be sent to her by her employer and/or the court and/or the collection agency. I doubt she did not receive it.

    The garnishment document the employer has dictates when the garnishment ends, i.e. when the balance is paid (or after a time period depending on the state, but the agency can re-apply for the remaining balance). If she is making payments outside the employer’s garnishing, the employer will never know, and thus the remaining balance will not be reflected on her pay stub accurately in this case.

    • deadandy says:

      Yeah, the shenanigans are basically her not realizing where the paperwork is and who she should be talking to. I expect that someone who lets that amount of credit card debt go into collections is probably similarly organized when it comes to court documents that may or may not have found their way into her possession.

    • pythonspam says:

      “First, her calculated balance of $21 remaining and their of $457 remaining makes perfect sense. She is not calculating the fees and interest racked up.”
      If they are getting a garnishment for Y number of payments for $X , why would they not amortize the interest and fees so that when the last payment is garnished or the last $100 paid, the debt would be paid off?

    • Pagan wants a +1 button says:

      I call shenanigans on the collection agency getting a garnishment order when she was meeting the terms of her payment plan. If the deal was for her to pay $100.00 over X amount of time and she was holding up her end of the deal, how did they get a judge to agree to garnish?

  8. Blueskylaw says:

    This sounds like new car dealers. I went with a friend to look at a car (BMW) for him and here’s the basic scenario: The price of the car is $20,000, he’s putting $5,000 down and financing $15,000 over 5 years at 5% interest. The car dealer asks him how much he could afford to pay per month? I look at the guy and ask him what the payment would be on a $15,000 dollar loan over 5 years at 5% interest and why he wants to know how much my friend could afford to pay per month. The guy basically ignored me because he knew I was there to protect my friend from shenanigans like that. We left shortly after that

    • Snape says:

      Were they drawing on a piece of paper with 4 squares? The scam is to get you angry about the required down payment or the value of your trade in. Then they go talk to the manager to “see what they can do” and its your lucky day the down payment is cut in half and you get a bit more on the trade in.

      All this to divert you from the sale price of the car.

    • atthec44 says:

      A new BMW for $20k? Where do I sign up?

  9. RandomLetters says:

    Why would the agency try and sell a debt they are actively collecting on? Aren’t debts normally sold for pennies on the dollar? And if they did sell it would the court order for garnishment carry over to the new owner of the debt?

    • Murph1908 says:

      This was one of my thoughts. The only reasoning I could think of was it was part of a bulk buy. But yeah, you would think that a collection agency would want to hold onto an account that’s sending them money.

      • Jawaka says:

        They’ve collected the majority of the debt back already. They can probably make more by selling it now than they can by collecting the remainder of the balance.

        • Kitamura says:

          What sort of business would buy a debt for more than they could collect on though? Doesn’t sound like anyone who followed that type of business model would be able to stay open very long.

    • Tim says:

      Debts are bought and sold all the time, for any number of reasons. Maybe the debt wasn’t profitable to them. Maybe they traded it for a different debt. Maybe it was included in a big package with a ton of debts.

  10. human_shield says:

    $1,200 plus $2,000 in legal fees. Payment of $300/mo will have her paying the ongoing interest charges of $310/mo forever.

  11. frodolives35 says:

    They are probably selling it to a sister company owned by the same parent company so the can add extra fees etc. Rinse and repeat. Most debt purchasers/collectors bend the law to the point of breaking.

  12. Blueskylaw says:

    I know about the four square and he wasn’t using that. He just flat out thought he had two suckers who walked into his web. He talked bullsh*t, didn’t look at me when I talked to him, pounded his fist on the desk, etc.

    Most of the time when I go to a new car dealer and I call the salesman out on their bullshit after 2 or 3 tries to scam me, they wise up and know I won’t be fooled (I used to go new car shopping for fun when I had nothing to do on weekends) so they start dealing straight with me but this guy just didn’t get it that he wouldn’t be able to fool me so we left.

  13. skakh says:

    Perhaps Governer Portly could put down one of his donuts and take a look at the NJ laws in this area.

  14. thomwithanh says:

    Collections agency obtaining garnishments? Wouldn’t the debt be with an attorney by that point – not sure what the laws are in NJ, but in NYS collections agencies cannot garnish you, only lawyers once you’ve been properly sued and found liable.

  15. FDCPA expert says:

    Hey! So happy to be able to weigh in here!

    Debt collectors are not required under the FDCPA to give a running account of the debtors payments thus far. If she is paying to a court officer through garnishments then the dc already has a judgment against her. Therefore she has no leg to stand on as far as trying to sue them for not giving her a running account balance.

    HOWEVER! And NJ woman, I hope you’re reading this:

    The Debt collector has now discussed her debt with a 3rd party! Bingo! Case!

    The violations under the FDCPA are: 1692b(2)! And 1692c(b)!

    They discussed her debt with Bamboozled.
    “When Bamboozled contacted the agency, they were told no account information could be given because the debt — which by this point should have been fully paid off — was about to be sold to another agency.”

    Ms NJ’s savvy attorney will no doubt subpoena Bamboozled’s phone records and obtain a statement from that reporter, as well as subpoena the phone recordings of said debt collector.

  16. oldwiz65 says:

    Collection agencies don’t pay much attention to the laws unless they get caught; then they simply declare bankruptcy and start a new company the next day and continue business as usual. Any fines are considered part of the cost of doing business. Their only objective is to collect money by any means possible.