Stop Seizing Paychecks, Senators Write To Capital One And Other Debt Collectors

Wage garnishments ordered before the pandemic started have continued for many workers during the recession. Senators Elizabeth Warren and Sherrod Brown have demanded an end to the practice.
WASHINGTON, DC - MAY 18: Wearing a face mask to reduce the chance of transmission of the novel coronavirus, Sen. Elizabeth Warren (D-MA) arrives at the U.S. Capitol for a vote May 18, 2020 in Washington, DC. The Sena... WASHINGTON, DC - MAY 18: Wearing a face mask to reduce the chance of transmission of the novel coronavirus, Sen. Elizabeth Warren (D-MA) arrives at the U.S. Capitol for a vote May 18, 2020 in Washington, DC. The Senate is back in session during the COVIDpandemic for a procedural vote on the nomination of Scott Rash to serve as federal district judge in Arizona. (Photo by Chip Somodevilla/Getty Images) MORE LESS
June 25, 2020 11:56 a.m.

This story first appeared at ProPublica. ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.

The nation’s largest debt collectors should suspend seizing wages “immediately,” two prominent senators demanded in letters sent Wednesday.

The letters came in response to a ProPublica story this month that focused on how the most prolific filers of debt collection lawsuits, Capital One and large debt buying companies, continue to garnish paychecks amid the COVID-19 pandemic. While most courts shut down to new hearings in March, wage seizure orders obtained before then were allowed to continue in most places. That left some essential workers and others desperately searching for relief amid the economic downturn.

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“Filing collection lawsuits and garnishing the wages of consumers already struggling to pay for basic necessities will only exacerbate the economic and public health crisis,” Sens. Elizabeth Warren, D-Mass., and Sherrod Brown, D-Ohio, wrote.

Brown and Warren sit on the Senate Banking Committee, which oversees financial services companies. Brown is the ranking member.

Capital One largely stopped filing new suits after mid-March, but other large collectors did not stop filing new suits. Warren and Brown alsowrote to Encore Capital Group and Portfolio Recovery Associates, two of the largest debt buyers in the country. Both of them continued to file suits into April and May, according to ProPublica’s review of online court databases.

In the letters, the senators also request an accounting from the companies of how many suits and wage garnishments they’ve filed this year. Because collection suits are filed in state and local courts, it’s impossible to arrive at a full accounting of such suits (although ProPublica has tried to shed light on the practice by rounding up data from various states). This makes an aggressive form of collection that affects millions of people each year largely invisible to the public. Answers from the companies may help to reveal the scope of the biggest plaintiffs’ activity.

In a statement in response to the letter, a Capital One spokesperson said: “Since the pandemic first began, we have been committed to working with all of our customers who are experiencing financial hardship as a result of COVID-19. In addition to deferring payments, offering tailored payment plans and waiving fees, we have stopped the filing of all new bank garnishments and lawsuits and have taken action to prevent the garnishment of any stimulus funds. We recognize that these are exceptional times and our policy is to work with any customer who needs help and is impacted by COVID-19.”

A spokesperson for Portfolio Recovery declined to comment, saying the company was reviewing the letter and preparing its response. ProPublica also contacted Encore for comment and will update this story if it responds.

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