Loophole Allows Debt Collectors To Withdraw Money From Your Stimulus Check
WASHINGTON DC – After being stuck on her Wells Fargo account, “I’m out of money,” Dee Hemsley told WPTV.
She is now wondering when she will be able to collect her unemployment benefits.
She says they were deleted from her account and she fears the same for her stimulus check.
“These debt collectors are freezing people’s accounts because they’re going to take their stimulus money,” she said.
FICO-certified credit pro Paul Oster says a loophole in the new COVID-19 stimulus package is driving the change.
“The way it’s been adopted in the context of budget reconciliation, these third party debt collectors are going after consumers,” he said.
Oster has been helping people fight third-party debt collectors for 16 years and is the president of Better Qualified, LLC.
“What is happening is that they are going to freeze and seize the bank accounts of people who have direct deposit for sure,” he said.
The only way a debt collector can do this is to have a judge pass judgment against you, which Oster says is pretty easy to do.
“If there has been a judgment filed against you, you have to deal with it head on. It’s a court order, ”he said.
But a lot of people don’t find out they’ve been served until their account is already frozen, according to Oster, and that’s when you should get a lawyer. If you receive the stimulus check in the mail, he suggests giving it to someone you trust so they can cash it for you.
“Everyone who is in debt is poor and they depend on it to keep a roof over their heads,” said Chakusola Guinn, who has had to deal with credit card and student loan debt for years.
That’s why Oster says a household should be run like a small business and people should cut fat like monthly subscriptions until they have at least a six-month stash.
“The only thing this pandemic has shown us all, no one had a clue to endure the crash, did they?” Oster said. “Most people didn’t survive 30 days, 60 days, we were all in crisis mode.”
He also says people should call their members of Congress and ask them to code stimulus payments as benefits … so that debt collectors can’t keep taking money out of stimulus checks.
Wells Fargo told WPTV they are investigating Hemsley’s frozen account.