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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.

Sen. Elizabeth Warren, D-Mass., on Jan. 29. Warren and Sen. Sherrod Brown, D-Ohio, wrote in letters that the nation’s largest debt collectors should suspend seizing wages “immediately.” (Samuel Corum/Getty Images)

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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.

“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 also wrote 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.

Sheryl Wright, an executive from Encore Capital's subsidiary Midland Credit Management, said, “In keeping with the long-standing hardship policy in our Consumer Bill of Rights, we suspend collections when a consumer tells us they’ve been directly impacted by COVID-19, and we stopped bank garnishments for all consumers in mid-March. For any bank garnishment that was initiated prior to the stoppage, if the consumer informs us that we inadvertently levied exempt funds, including CARES Act relief payments, we immediately initiate a refund.”

Update, June 25, 2020: This story was updated with comment from Encore Capital’s subsidiary Midland Credit Management.

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Portrait of Paul Kiel

Paul Kiel

Paul Kiel covers business and consumer finance for ProPublica.

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