Stop Debt Collectors from Seizing your Coronavirus Stimulus Payment

Coronavirus (Covid-19) Debt Collection Problems

Debt collectors are eager to take your Coronavirus stimulus payment. In many cases they will seek to garnish the stimulus money right from your bank account. Congress has not entered any legislation to protect these payments from seizures by debt collectors but there are still a few ways to protect your Covid-19 stimulus payment.

Get a paper check of your Coronavirus stimulus payment instead of using direct deposit

Have the IRS send your stimulus payment, or any other tax refund for that matter, by sending a traditional paper check by mail. That will substantially delay the payment however, so be careful. If you need the money now and it is going to be automatically garnished, get an attorney to file an emergency protective order to protect the stimulus payment from garnishment. When the payment arrives, cash it or take it out of your account as quickly as possible. That would prevent most debt collectors from taking the money in most cases. Use it for the food, medical care, clothing, housing, and other necessities for  which the Covid-19 tax refunds were intended. Even if your bank account is already frozen or being garnished, simply cashing the check will not allow the collection agency to take it. You can check the status of your Covid-19 stimulus payment with the IRS online.

Negotiate with the debt collection agency

Most collection agencies will take your money without any second thoughts. During this Covid-19 panic however, many are likely to be sympathetic to your need for the Coronavirus stimulus payment to go toward food, clothing, rent, mortgage payments, medical care, or other necessities. It can’t hurt to at least try to negotiate time to repay the debt when the crisis ends to to even request a goodwill return of the money if it was already seized.

Its true that most debt collectors, collection agencies, and collection attorneys have hearts of stone and care far more about money than they do about people but some may still do the right thing during this pandemic. If they won’t move on to the options below.      

Object to any seizure of your stimulus check

If you have a garnishment order in place you should immediately file an objection to any seizure of your stimulus check. You may also be able to file for an emergency injunction to prevent the seizure of your Covid-19 stimulus payment. Even if you are trying to negotiate with the collection agency, you must still file an objection or request an injunction.

Coronavirus stimulus payments are supposed to help people pay for necessities such as food, rent, mortgage payments, clothing, and medical care. The Covid-19 payments are not intended to use to pay for past debts. You should therefore object if the money is garnished by a collection agency.

There are likely to be some state protections or exemptions to seizure of stimulus payments issued for national emergencies so check your states laws for other possible ways to argue your payment is exempt from seizure.

Stop collection harassment

Many times the right letter can stop collection harassment. Some debt collectors may also stop garnishments or seizures of your Coronavirus stimulus payment if you send the right letter. Debt validation letters, debt verification letters, and other dispute letters can help stop the seizures. These usually work best before a garnishment is in place but may still be effective if the bank is garnishing your Covid-19 stimulus payment. If you have income that is already exempt from seizure or garnishment such as Social Security disability or other similar exempt income, a properly written exemption notice letter may also get collection agencies to stop a bank garnishment. 

Sue the debt collector

Under the Fair Debt Collection Practices Act (FDCPA) you have a right to sue any debt collector, collection agency, or collection attorney that violates your rights. Although this issue is far from clear, the courts should consider any seizure of stimulus payments to be deceptive, unfair, unconscionable, or abusive. The Covid-19 stimulus checks are meant to help American’s survive not line the already bloated pockets of collection agencies. The money should therefore be immune from seizure.   

Use caution however. Don’t go this route alone. Hire an experienced Fair Debt Collection Practices Act litigation attorney. There is no clear ruling from the courts yet that seizing a Coronavirus stimulus payment violates the FDCPA so you want experienced assistance in making these arguments. 

Contact Us Now for a FREE Case Review

If your Coronavirus stimulus payment was already garnished, seized, or frozen by a debt collector, collection agency, or debt collection attorney let us know immediately. We can help stop a garnishment, file an injunction, negotiate with your creditors, or take other action to protect your Covid-19 stimulus payment check. 

Debt Statute of Limitations in Utah

Breach of contract statute of limitations

By law, a statute of limitations prohibits collection agencies from suing you for old debts. The limitation period varies for different kinds of debt and can be re-started under certain circumstances so never assume a debt collector is barred from collecting a debt under the statute of limitations simply because the applicable time period has expired. Gather your paperwork, review your payment history, review the contract, and contact an attorney before you make any payments or promises to pay if you think the debt might be too old to enforce in court.

Does a debt statute of limitations prevent debt collectors from suing?

The statute of limitations is an affirmative defense so it does not automatically apply or prevent debt collectors from seeking to collect past due debts. It is raised in court proceedings which will stop the debt collection lawsuit if the court determines that the time frame when the debt collector is allowed to file a lawsuit against you has passed. Then, the court will dismiss the case against you. If you are sued for a delinquent debt, and believe the statute of limitations might prevent the collection agency from suing to collect that debt, you must raise the statute of limitations defense when you file your answer. Because it is an affirmative defense, failing to raise it properly could cause you to lose its protections.

Can debt collectors attempt to collect a time-barred debt?

If the collection agency is not suing you but is merely attempting to collect a debt barred by the statute of limitations, things get more cloudy. Generally, the collectors may attempt to collect time-barred debts. But they can’t threaten to sue or make any deceptive representations in doing so. Threatening to sue you when the debt is time-barred or attempting to deceive you into thinking they can sue you when they can’t are violations of the Fair Debt Collection Practices Act which would enable you to sue them for damages.

For example, in a recent case Seventh Circuit Court of Appeals held that Portfolio Recovery Associates, a debt collection agency, violated the Fair Debt Collection Practices Act for using carefully crafted language in a collection dunning letter that attempted to obscure from the debtor that the statute of limitations prohibited the collector from suing or threatening to sue to collect the debt.

It is also a violation of the Fair Debt Collection Practices Act if the debt collector does anything to try to trick you into renewing the statute of limitations. As discussed below, certain acts on your part can reset the time period but debt collectors may not deceive you into taking any of those actions. Most often this occurs when debt collectors attempt to collect zombie debts that are long past the limitations period that were purchased by the collection agencies for pennies on the dollar.

What is the statute of limitations for debt?

In Utah, there are different limitation periods applicable to debt. Which particular statute of limitations applies depends on the type of debt. Generally, the statute of limitations for debt based on a written agreement is six years. Oral contracts and debts incurred for open store accounts for any goods, wares, or merchandise are enforceable in court for only four years. The longest statute of limitations in Utah for debt is an eight year statute of limitations to enforce a judgment.

There are other statutes of limitations in Utah that may apply in less common situations so please don’t consider this list to be exhaustive. And be careful with judgments because judgments can be renewed every eight years which will restart the eight year limitations period.

Is the account open ended or closed ended?

Whether the account is open ended or closed ended is a critical inquiry to determine which statute of limitations applies. Closed ended debt generally refers to single isolated transactions and will generally be subject to the six year statute of limitations for debts based on written agreements. Open ended debts may fall under the four year period for open store accounts but in many cases may fall under the six year written contracts period of time.

For example, a typical car purchase agreement would fall under the six year statute of limitations because the transaction is based on a written agreement. Conversely, a credit card issued by a retail store that may only be used to make purchases from that store will normally fall under the four year period.

The issue is more confusing when a credit card company issues a credit card based only on an application but never obtains a written agreement. Lower courts generally consider the six year period to apply. That outcome appears to be a fairly obvious misreading of the statute but unfortunately the Utah Supreme Court has never clarified this issue. Until it does, the safe assumption if you are being sued for debt is that the six year statute of limitations will be held to apply in individual cases of credit card debt. If there is any doubt at all and the debt is older than four years, contact an attorney to see if there is any way to argue the four year period applies. This is an issue that needs to be tested in court.

When does the statute of limitations begin to run?

Generally, the statute of limitations for debts based on written contracts begins to run when the first payment was due but not paid. In other words, the period starts when the contract is breached. That date could arguably be extended by applicable grace periods so be careful here if the dates are close. Also keep in mind that circumstances other than failing to make a payment can result in a breach of contract so be aware of whether any other breaches of the contract might have occurred.

For debts that fall under the four year period, the statute of limitations starts running when either the last charge is made or the last payment is received, whichever comes last.

For judgments, the eight year period begins running from the date of the judgment. If the judgment is renewed, the eight year period is also renewed.

Reviving, Waiving, or Extending the Statute of Limitations

There are several ways you can revive, waive, or extend the statute of limitations. Debt collectors violate the Fair Debt Collection Practices Act if they attempt to trick you into doing so but aggressive and abusive collectors and even collection attorneys often do anyway.

Reviving the Statute of Limitations

Making a payment on a time-barred debt will revive, or restart, the statute of limitations. Even a tiny payment will revive the debt. This is why debt collectors often ask for a token payment on old debts. And whether the debt is only a year or two old or way outside the statute of limitations does not matter. Making that token payment restarts the clock.

Making a written promise to pay the debt will also restart the statute of limitations. Again, this is why collectors will ask you for an email or letter confirming your intent to pay a debt even when they don’t demand payment. They know that written promise to pay will revive even the oldest debt.

Acknowledging the debt in writing is yet another way you can revive the statute of limitations on a time-barred debt. This is why you must avoid mainstream credit repair companies because most have no clue that a poorly written credit dispute letter can result in an acknowledgment of the debt and restart the clock.

Waiving the Statue of Limitations

As discussed previously, the statute of limitations is an affirmative defense that is waived if you fail to raise it when you are sued for the debt. This is a good reason to seek legal counsel in debt collection lawsuits. A good attorney will properly preserve and argue this, and other, applicable affirmative defenses.

Extending the Statute of Limitations

Extending the statute of limitations, also referred to as tolling, occurs when a person is no longer subject to the jurisdiction of the Utah courts. Most frequently, this occurs when a person moves out of state for a period of time and then returns. When that occurs, the time when the person was absent and not subject to personal jurisdiction is not included as part of the time limited for the commencement of the action under the statute of limitations.

As discussed above, making a payment on the debt also extends the statutory time period for collections. Because of this, some more aggressive collectors will actually make phantom payments on debt they own in the hopes of extending the statute of limitations. Yes, doing so is a violation of the Fair Debt Collection Practices Act but many don’t get caught as it is sometimes difficult to detect and prove who made the phantom payment.

What should you do if a debt collector attempts to collect a time-barred debt?

If a debt collector is attempting to collect a time-barred debt or a debt you think might be too old to collect, don’t make any payments on the debt and don’t make any promises to pay the debt. Find out if the debt is too old first. Otherwise you will reset the statute of limitations and even the oldest zombie debt will be revived. Check the paperwork and your payment history to see if the debt is too old and don’t be afraid to ask the collector for proof of the debt, the contract, and a payment history if you need copies.

If the collector has sent you letters that seem unclear whether or not they can sue you for the debt or they have threatened to sue on a time-barred debt over the phone, contact a consumer protection attorney right away. You could have a claim against the collector for violating the Fair Debt Collection Practices Act which would entitle you to make the collector pay you damages.

You should also contact an attorney if you are being sued for a time-barred or zombie debt. That way you can be sure your affirmative defenses are preserved and properly asserted and you may be able to seek damages from the debt collector.

No matter what you do, act quickly. The statute of limitations will not automatically stop debt collection for an old debt nor will it protect you in court unless you properly raise the defense. In many of these cases attempting to collect the time-barred debt may violate the Fair Debt Collection Practices Act as well which could allow you to turn the tables and obtain payment from the debt collector.

Can an arrest warrant compel debt payment?

Utah debt arrest warrants

There are many misconceptions about whether or not an arrest warrant can be issued by a court of law for failing to pay debt. A recent article from the Standard Examiner entitled “Utah courts increase use of civil bench warrants to compel debt payments” shows how easily some of these misconceptions are spread. And that isn’t the first time the Standard Examiner misreported the issue. In 2016, it reported incorrectly that Rex Iverson died in jail after being arrested for failing to pay debt. If the media won’t report it right how can the average consumer be expected to know whether failing to pay debt can result in their arrest?

Arrest warrants in consumer debt cases are for failing to appear, not for failing to pay

The truth is that, for most debt, the courts may not issue warrants for arrest to compel debt payments. Courts can issue orders allowing creditors to garnish your wages, place a lien on your home, and seize your non-exempt personal property but they cannot have you arrested for failing to pay. The misconception arises because courts can, and justice courts in Utah often do, issue arrest warrants to debtors for failing to appear in court.

But that is a critical distinction. Merely failing to pay debt under normal circumstances will not result in your arrest. True, you can be arrested for failing to pay child support, court fines, or for writing bad checks, but as long as you appear in court and cooperate with the creditor’s efforts to discover your financial assets, you cannot be arrested simply for failing to pay a credit card account or other consumer debt. When you don’t appear at a court-ordered hearing for a supplemental order, however, the court can, and usually will, issue a warrant for your arrest.

The warrant is basically an order for contempt. The court issues the warrant for failing to obey the court’s order for you to appear, not for failing to pay the debt.

These arrest warrants arise in debt cases after the creditor obtains a judgment against the debtor and the debtor fails to appear at a supplemental hearing. These supplemental hearings are court proceedings in which the debtor is required to provide the creditor with details of their assets. That way the creditor can discover the debtor’s bank accounts, employment, and personal assets it can use to satisfy the debt.

An arrest warrant requires personal service

An arrest warrant for failing to appear at a supplemental proceeding is not automatically ordered by the court. Creditors are required to directly serve the debtor with notice of the supplemental hearing before the court will issue a warrant for arrest for failing to appear.

And it is not sufficient to serve another person living in the debtor’s household. For supplemental proceedings the creditor must serve the actual debtor directly. That differs from service of process of the original complaint which is effective upon service of someone else living in the debtor’s household.

In cases where the debtor did not receive direct personal service the court will request an order to show cause and request to continue the hearing to another future date. That way the creditor can try again to serve the debtor.

That doesn’t mean debtors should necessarily avoid personal service, however. Each time the constable attempts service it costs money and that money is added to the debt.

A debtor’s appearance at a supplemental proceeding can be avoided in some cases, but proceed with caution

When debtors are served with notice of a supplemental proceeding to collect a judgment they are provided with a list of questions. The questions relate to the debtor’s assets such as bank accounts, income, and personal property. If the debtor responds to those questions in sufficient detail to satisfy the creditor, the hearing for a supplemental order can be cancelled. Debtors should proceed with caution however, because unless they receive notice from the court the hearing is cancelled they must still appear.

Many times the creditors will still want the hearing to occur if only to put on the court record that the debtor satisfied their requirements. This is good practice for the debtor as well because it can prevent arguments of failing to appear from creeping up later. If the debtor answers the questions prior to the hearing, the court may still want the hearing to occur for the same reasons. Either way, it is best to appear and cooperate to be sure the creditor cannot request an arrest warrant.

The bankruptcy stay can prevent issuance of an arrest warrant

In some cases debtors may be insolvent and simply cannot pay the debt because their living expenses far exceed their income. In these cases, failing to appear will still result in an arrest warrant. One approach to resolving the debt may be to seek protection by filing bankruptcy. Many debtors don’t have enough debt to justify bankruptcy, but in truly desperate situations it can be an excellent tool for starting over. 

Once a bankruptcy is filed and notice is provided, the creditor is required to stop any further attempts to collect the debt. That includes hearings for supplemental proceedings. Again, debtors should exercise caution here because the bankruptcy stay will not automatically recall an already outstanding warrant. If the creditor has already obtained an arrest warrant but it has not yet been executed, the debtor who filed bankruptcy could still be arrested and have to pay the amount indicated in the arrest warrant to be released from jail.

Payment plans

Many creditors will accept payment plans to help debtors pay judgments. They will still likely require the debtor’s appearance at a supplemental hearing but if there are any assets or wages to protect, reaching an agreement with the creditor can be a good way to resolve the debt and avoid bankruptcy.

Payments can also be useful in reducing the debt in some cases. For example, when the debtor has no assets or disposable income creditors may be willing to accept an amount lower than the amount of the judgment. In many cases the creditors only accept less than the amount due when the debtor can make one lump sum payment but some creditors will accept less with monthly payments over time as well. 

In most cases, it is better to seek a payment plan before a judgment is entered. That way the creditor will still have to request a judgment from the court before it can garnish wages, garnish bank accounts, or seize unsecured non-exempt assets.

Consent judgments

The creditor may require a consent judgment in negotiating the debt to avoid the problem of having to obtain a judgment before it can seek garnishments and property seizure to collect the debt. A consent judgment, also referred to as a stipulated judgment, is entered when both parties consent to entry of the judgment with the court. Debtors often enter into consent judgments because they do not understand the consequences of doing so or because they have little to no choice in the matter. There are numerous ways to lose a debt collection lawsuit so debtors can be easily backed into a corner and feel they have no other choice. Overall, it is better to avoid a consent judgment either by prevailing in the lawsuit or by reaching a settlement agreement that doesn’t require entry of a judgment.


It is truly tragic that Rex Iverson died in jail but an arrest warrant was not issued against him for failing to pay a debt. Like other cases in the Utah courts, the arrest warrant was issued because he failed to show up when ordered to appear in court. To Mr. Iverson’s friends and family that distinction is almost certainly irrelevant, but to the average debtor the difference is important.

Debt collection lawsuits do not normally need to result in the issuance of an arrest warrant. Even if you cannot pay you should still appear throughout the proceedings. If you have assets you want to protect negotiate a payment plan or find out if bankruptcy is appropriate for your situation. Either way you should appear in court and cooperate.




Booted by Parking Solutions? Fight back!

Sue Parking Solutions

Parking Solutions, a Salt Lake City, Utah based company, issues tickets and immobilizes vehicles for various businesses around the Salt Lake valley. In some of these cases, they are doing so illegally.

Parking Solutions’ deceptive practices

One typical scenario occurs in the parking lot on the corner of 600 East and 400 South in Salt Lake City, Utah. In that lot, Parking Solutions issues tickets or immobilizes vehicles with a boot when one of the occupants goes to Jimmy John’s which is technically not a part of the parking lot served by the surrounding businesses like Cafe Zupas, Tonyburgers, or Jamba Juice. The problem, however, is that does not automatically constitute a violation of the posted parking rules.

Parking Solutions Salt Lake posted rules at Jimmy Johns

Think about it. If you go to Jamba Juice, a company for which that parking lot is intended, and your friend who drove with you goes to Jimmy John’s, you did not violate the parking rules that are posted on the property. You patronized Jamba Juice as the rules allow. No problem then? Wrong. Parking Solutions has an agent lying in wait to ticket or boot your car because one of the occupants went to Jimmy John’s. He, in his blissful ignorance, believes the patently illogical idea that none of the occupants can leave the property even if the others actually patronize the intended businesses.

Until you use [one of these businesses] you are trespassing.

Daniel Graves, Parking Solutions

Parking Solutions’ past criminal conduct

This problem has grown so bad that Parking Solutions employee Daniel Graves was actually charged with interfering with an officer in discharge of official duties for booting a Salt Lake City Fire Department emergency vehicle and his subsequent refusal to remove the immobilization device under direct orders by the police department. Ironically, Daniel Graves even claimed the police were extorting him when they demanded he remove two boots from their emergency vehicle. Justin Bird, Parking Solutions owner, seems to completely support such ridiculous conduct by Daniel Graves on behalf of Parking Solutions as he personally participated in refusing to remove the boot from the emergency vehicle, has been known to deny valid requests for refunds, and may have lied to government officials in a recent investigation over his deceptive business practices. Justin Bird even plead guilty on behalf of Parking Solutions to criminal charges of operating without a proper business license.

Parking Solutions Salt Lake City, Utah

In any event, Salt Lake City consumers should not be deceived by Parking Solutions’ unlawful and deceptive conduct and they should not pay any extortionate amounts. Instead, save your receipts to show you patronized one of the businesses the parking lot serves and contact a consumer protection attorney who can sue Parking Solutions on your behalf. Under Utah law you may be entitled to a refund of the $75.00 you paid to Parking Solutions and in some cases may even be entitled to a much higher actual damages award if Parking Solutions illegally tickets or boots your car and you can prove you patronized one of the businesses served by that parking lot. Either way, don’t be a victim.

Please note that the listing of any specific company or individual is not meant to state or imply that they committed any illegal or improper act; rather only that an investigation is or was being conducted by private attorneys to determine whether legal rights have been violated. The statements expressed herein are statements of our opinion only.

Identity Fraud Reaches Record High Numbers

Identity fraud increased 16 percent in 2016 with a record 15.4 million Americans falling prey to one form of identity theft or another according to the new 2017 Identity Fraud Study from Javelin Strategy & Research. The total amount stolen in 2016 also increased to $16 billion dollars.

Card-not-present online fraud saw the biggest increase

The increases come mostly from online transactions also known as card-not-present fraud. In online card-not-present fraud there was 40 percent increase in thefts and out of pocket costs to the consumers were double the cost when compared to fraud involving point of sale transactions. Experts believe the spike in card-not-present online fraud is due largely to the new chip technologies which protect consumers more effectively during in-person purchases.

Account takeover fraud also increased

Account takeover fraud occurs when a thief hijacks an existing account. Account takeover frauds increased 61 percent in 2016 with victims paying an average of $263 which is five times higher than the average theft. The total amount lost in 2016 to account takeover fraud was approximately $2.3 billion dollars. There is no clear reason why account takeover fraud increased so dramatically but some experts believe the increase is the direct result of a lack of consumer oversight over their own accounts and the delays involved between purchases and billing statements being sent out which increases the amount of time before an account takeover theft can be detected. Unlike new account fraud, account takeover fraud cannot be detected by regularly reviewing your credit reports.

New account fraud

New account identity fraud also continues to plague American consumers and does not appear to be decreasing by any appreciable measure. In new account fraud identity thieves open new accounts in consumer’s names using information they either stole or purchased on the black market. Many of these new account theft cases go undiscovered for years until the consumer either learns of the theft through a review of their credit reports or when they are contacted by a debt collector seeking to collect the fraudulent debt.

Social networking fraud

The study also revealed that consumers who share their social life on digital platforms are at a much higher risk of account takeover fraud than consumers who are mostly offline or who are more private with their information. Social networks allow thieves access to contact information, information about friends and family, and updates on the daily lives of their victims. Some consumers even post travel plans online which allows identity thieves to add charges to an existing credit card or open a new account with less likelihood of being detected quickly.

The simple fact is that active social networkers are far more open about private information and are therefore more susceptible to fraud. The good news for social networking consumers is that, although they are more likely to be a victim of identity fraud, they are also likely to discover the theft more quickly than offline consumers.

Simplify identity fraud prevention

The average consumer does not need to hire a credit monitoring company or lock down their credit reports with credit freezes to prevent identity fraud. The most simple methods are often the most effective.

Start by using more discretion with providing information to strangers online. To be most effective, don’t share anything publicly. If you are going on vacation, just purchased a home, or have been shopping online recently, keep that information private. Identity thieves are masters of using information that seem harmless to access your accounts or open new accounts in your name. Don’t give them the chance.

Another proven method is to use a credit card for purchases rather than a debit card. That way, your losses are limited and theft can be detected more easily. Debit cards allow access to your entire account which can greatly increase any potential loss to identity fraud. If you insist on using a debit card rather that a credit card you can use multiple accounts to reduce your potential loss. Put a limited amount of money in the debit card account each week while keeping the bulk of your hard-earned money in a separate account. That way, the larger amount is protected and only the smaller account is at risk. Of course, nothing you do can prevent all forms of theft or identity fraud but diligent efforts will certainly reduce your risk and potential losses.

Ultimate Credit Score Guide

Understanding your credit score and what factors impact that score are crucial tools for building a healthy credit rating.

Your credit score determines how much you will pay in interest rates to borrow money or even whether you will even get financing in the first place. Credit reports are also used to decide whether to provide you with insurance, housing, and utilities. Even many employment decisions are based on your creditworthiness.

A higher credit score makes you a lower risk to lenders, which, in turn, means you are more likely to get credit or insurance—or pay less for it. It also means you are more likely to get that dream job you worked so hard to achieve.

Keep reading and learn to understand, manage, and improve your credit rating.

Chase Fined $216 Million for Illegally Robo-Signing Affidavits and Selling Zombie Debts

JPMorgan Chose Fined for Zombie Debt Collection Practices


If you owe JPMorgan Chase for a zombie debt or if Portfolio Recovery, LVNV Funding, Midland Funding, or other junk debt buyer has filed a lawsuit against you to collect a Chase debt, you may be able to get your lawsuit thrown out of court.

On July 8, 2015, the Consumer Financial Protection Bureau (CFPB), Attorneys General in 47 states, and the District of Columbia have taken action against JPMorgan Chase for selling “zombie debts” to junk debt buyers and illegally robo-signing court documents. “Zombie debt” refers to accounts that were inaccurate, settled, discharged in bankruptcy, not actually owed, or otherwise not collectible. “Robo-signing” refers to the practice of automatically signing affidavits under oath without actually reviewing the material on which that oath is based.

“Chase sold bad credit card debt and robo-signed documents in violation of law.”
Richard Cordray, Director of the Consumer Financial Protection Bureau

Under the administrative orders, Chase is required to take certain actions to protect consumers from its unlawful practices. Chase will now be required to carefully document and confirm its debts before selling them to debt buyers or filing collections lawsuits and it is barred from selling certain debts. It must also prohibit debt buyers from reselling debt. Chase was ordered to permanently stop all attempts to collect, enforce in court, or sell 528,000 existing accounts. CFPB Director Richard Cordray said, “Today we are ordering Chase to permanently halt collections on more than 528,000 accounts and overhaul its debt-sales practices. We will continue to be vigilant in taking action against deceptive debt sales and collections practices that exploit consumers.”

Chase has also been ordered to pay at least $50 million in consumer refunds, $136 million in penalties and payments to the CFPB and the included 47 states, and a $30 million penalty to the Office of the Comptroller of the Currency (OCC) in a related action.

Chase Engaged in Unfair, Deceptive, or Abusive Acts and Practices

According to the CFPB, Chase violated the Dodd-Frank Wall Street Reform and Consumer Protection Act’s prohibitions against unfair, deceptive, or abusive acts and practices. Specifically, the CFPB and 47 states held that Chase:

  • Sold accounts that had been settled, fully paid, discharged in bankruptcy, identified as fraudulent, subject to a payment plan, no longer owned by Chase, or were otherwise not enforceable.
  • Sold accounts with missing or incorrect information about the amount owed and the amounts already paid.
  • Assisted third party and junk debt buyers in collecting debt deceptively by providing incorrect or inadequate information.
  • Robo-signed more than 150,000 affidavits and filed more than 528,000 debt collection lawsuits against consumers.
  • Systematically failed to prepare, review, and execute truthful statements as required by law.
  • Obtained judgments in debt collection lawsuits for incorrect amounts owed due to its calculation errors.
  • Failed to notify consumers and the courts when Chase discovered these issues.

Enforcement of CFPB and State Actions

Under the enforcement portions of these actions, Chase has been ordered to:

  • Cease all collection efforts on 528,000 consumer accounts that were sent to debt collection litigation between January 1, 2009 to June 30, 2014.
  • Cease collections, enforcement, sale, and credit reporting of any judgments it has obtained on those accounts.
  • Pay at least $50 million in cash refunds to consumers damaged by Chase’s unfair, deceptive, or abusive acts and practices.
  • Prohibit debt buyers and junk debt buyers from reselling accounts purchased from Chase, though they can sell the accounts back to Chase.
  • Confirm that its debts are collectable before selling the debts to debt buyers. The debts also cannot have been paid, discharged in bankruptcy, must not be the result of identity theft or other fraud, settled, or otherwise uncollectable.
  • Before sale, Chase must provide detailed documentation of the debt confirming the debt is accurate and enforceable.
  • For at least three years after selling the debt, Chase must provide debt buyers additional account information including; agreements, account statements, payment histories, and records of account disputes.
  • Notify consumers that their debt was sold and provide consumers their account information including; who purchased the debt, the amount owed at the time of the sale, and a notice that consumers can request additional account information for free.
  • Not sell zombie debts and other debts without documentation, including; debts that have been charged off or unpaid for more than three years, debts in litigation, debts owed by a service member, debts owed by a deceased consumer, and debts where a payment plan has been arranged.
  • Withdraw, dismiss, or otherwise terminate all debt collection litigation pending after January 1, 2009.
  • Stop robo-signing affidavits. Chase declarations must now be hand-signed, must reflect the accurate date of being signed by hand, and must be based on direct knowledge and personal review of the business records of the person signing. Furthermore, documentation supporting the affidavits must be actual records of the debt, verified to be accurate, and not created solely for litigation.
  • Verify specific account information about the debts when filing a debt collection lawsuit. That includes the name of the creditor at the time of the last payment on the account, the date of the last extension of credit, the date of last payment on the account, the amount of the debt owed, and a detailed accounting of any post charge off fees or interest.
  • Implement policies, procedures, systems, and controls to ensure compliance with federal consumer financial laws when selling and collecting debts.
  • Pay at least $50 million in consumer refunds.
  • Pay at least a $30 million civil penalty to the CFPB.
  • Pay a $30 million civil penalty to the OCC on a related matter.
  • Pay $106 million in payments to the 47 states who joined in the enforcement action.

California, Mississippi, and Wyoming were the only three states that did not join in as part of the settlement with the Consumer Financial Protection Bureau. California has litigation pending against JPMorgan for engaging in unlawful and fraudulent debt collection methods involving over 100,000 California consumers over a three-year period. The California Attorney General has accused JPMorgan of flooding the California courts with thousands of questionable cases every month. Mississippi is also continuing its own separate lawsuit against Chase that is ongoing at this time. The Wyoming Attorney General’s office could not be reached for comment on why they did not participate in the settlement.

If you owe JPMorgan Chase for a zombie debt or if Portfolio Recovery, LVNV Funding, Midland Funding, or other junk debt buyer has filed a lawsuit against you to collect a Chase debt, you may be able to get your lawsuit thrown out of court. Contact us now to find out if you have a case. You can also download the CFPB Consent Order to learn more.

Utah Security Freeze Law

Utah credit report freeze law

Identity theft is an increasingly common occurrence in Utah. If you are a victim one important tool you have to protect you from future theft of your accounts is the security or credit freeze. The freeze can be quite effective in preventing the thief from opening new accounts in your name if you act quickly.

What is a credit or security freeze?

In Utah, a security freeze is a way to freeze access to your credit so it cannot be easily stolen. You place the freeze with the three credit reporting agencies; Experian, Equifax, and TransUnion. Once placed, it prevents creditors from opening new accounts in your name. Although the freeze enables consumers to prevent access to their credit files, it also allows the consumer to enable access to selected companies.

Security Freeze Fees

Credit reporting agencies generally charge a fee for placing, lifting, or removing a security freeze on your reports but if you include a copy of the police report or provide the police docket number that documents the identity fraud the fee will be waived. If you are not a victim of identity theft, the fees for placing, lifting, or removing a credit freeze average between $3 and $10 per bureau though in some states the fees are even higher.

Credit Scores

If you are worried about how a credit freeze affects your credit score, fear not. A credit freeze has no effect on your credit score because it is intended only to prevent identity thieves from establishing new credit in your name. For the same reason, a credit freeze will not prevent identity thieves from accessing your existing credit accounts either.

Prescreened Offers of Credit

A credit freeze also won’t stop prescreened offers for credit. If you wish to stop prescreened credit offers, you may do so online, by mail, or by telephone by calling 888-5OPTOUT (888-567-8688). Opting out of prescreened credit offers can be for either five years or can be done permanently at your discretion. Not all companies send offers based on prescreening so opting out will not stop all junk mail; though it will stop most.

Free Annual Credit Reports

A credit security freeze also doesn’t prevent you from ordering your free annual credit reports or keep you from opening a new account, applying for a job, renting an apartment, or buying an insurance policy. You might need to temporarily lift the freeze for these types of credit but doing so is easy and fast in most cases. It is best to plan ahead when applying for these kinds of credit however so there won’t be needless delays or unwarranted rejections.

How to place a security freeze

Requesting a security freeze must be done in writing either online or by certified mail and you must include proof of your identity with the request.

Once requested, the credit reporting agencies must place the security freeze within five business days. They must then send you written confirmation of the freeze within ten business days of placing the request. The confirmation must include a unique personal identification number or password you can use to release your credit information to selected companies. If you issue authorization to a company to access your reports, authorization is limited to a specific party for a specific amount of time.

The security freeze contact information for the three major credit bureaus is as follows:


Equifax Security Freeze

P.O. Box 105788 Atlanta, GA 30348 Telephone: 888-298-0045 [/callout] [callout]

Experian Security Freeze

P.O. Box 9554 Allen, TX 75013 Telephone: 888-397-3742 [/callout] [callout]

Trans Union Security Freeze

P.O. Box 6790 Fullerton, CA 92834-6790 Telephone: 888-909-8872 [/callout]

How to temporarily unlock a security freeze

If you need to temporary unlock the freeze, no problem. Just call or write to the credit bureaus. The freeze must be temporarily removed within three business days if requested by mail or within 15 minutes during regular business hours if requested by telephone or electronically. You may request a temporary lift for a specific credit grantor or for a specific period of time ranging anywhere from one day to one full year.

Differences between a security freeze and fraud alerts

A security freeze completely locks down or “freezes” your credit. Once in place, creditors may not access your credit to extend new credit. Credit freezes are also specific to individual credit bureaus so you can freeze one and leave another totally open.

Fraud alerts, on the other hand, are merely a cautionary flag to alert lenders they should take special precautions before extending credit in your name. Typically, that involves calling you to verify that you are the actual person requesting the credit. When you set the fraud alert, you give the credit bureaus your telephone number so they know they are calling you rather than an imposter. Finally, when you set a fraud alert with one credit agency it is required by law to contact the other two so a fraud alert spans all three agencies rather than staying with one specific bureau.

The time frames are also different in some circumstances. For example, an initial fraud alert lasts for only 90 days while a security freeze stays in place for seven years. You can place an extended fraud alert however, which will also last for seven years so the time differences are not significant.

Another difference is that anyone can request a freeze of their credit while fraud alerts are only available to consumers who are, or reasonably believe they may become, victims of identity theft.

Security freeze considerations

A security freeze is an excellent tool in the fight against identity theft but in some cases you may want to remain cautious before placing a security freeze. For some consumers, the burdens of locking and unlocking the freeze can grow tiresome over time. For example, you may want to open a store credit card at the point of purchase and with a credit freeze in place might be stopped from doing so. The same is true for other types of credit such as requesting cell phone service or even applying for a job.

Another consideration is the burden of figuring out which credit bureau to unlock for any given situation. In some cases, the credit grantor can tell you in advance which credit bureau to unfreeze but there could be a situation where you would have to unfreeze all three agencies to be sure you the credit grantor gets the access they need to assess your creditworthiness.

Ultimately, the decision will be yours to make but if you want to prevent identity thieves from opening new lines of credit in your name, a credit or security freeze is one of many tool at your disposal.

FICO Credit Score Guide: Understanding Your Rating Profile

Understanding your credit rating is critical to sound financial management. Your credit score is a direct reflection of how well you manage debt. It impacts interest rates, lending decisions, employment possibilities, and even whether or not you can obtain an insurance policy.

Five components used to calculate your FICO Score

FICO Scores are based on main five categories; payment history, amounts owed, length of credit history, types of credit in use, and new credit. The relative importance of each category may differ for consumers who have shorter credit histories but are generally weighted as follows:

Pie chart of factors that impact FICO credit scores

Payment History (35%)

Your payment history is the most important factor in calculating your credit score. Late payments, charge offs, foreclosures, repossessions, liens, wage attachments, and bankruptcies will all negatively impact your score at varying amounts depending on the severity of the issue. The score also considers how late a payment was, how much was owed, how recently the negative payment history occurred, and how many accounts are listed with a negative payment history. For example, a 60-day late payment two months ago will hurt your score more than a 90-day late payment from two years ago.

Amounts Owed (30%)

The amounts you owe is also a heavily-weighted factor in calculating your credit score. The score considers how much you owe on individual accounts and how much you owe in the aggregate compared to how much credit you have available. This factor is also known as the utilization ratio. As a rule of thumb, you should strive to keep the amounts you owe on credit cards and other revolving debt below 10% of the total amount available.

Length of Credit History (15%)

Typically, a longer credit history will increase your FICO Scores. However, even consumers who haven’t been using credit for very long may have high FICO Scores depending on their other credit score factors. Generally, your FICO Score considers the age of your oldest and newest accounts and the average age of all your accounts. Older is better. The score also considers how long it has been since you used certain accounts so it may lower your score to have unused accounts in your credit history.

Types of Credit in Use (10%)

Your mix of credit use is also considered in your score. A good mix would include credit cards, retail accounts, installment loans, finance accounts, and mortgage loans.

New Credit (10%)

The amount of newly opened credit accounts also figures into your score. Too many new accounts in too short a time period will generally lower your score. Especially if your history is relatively short.

Factors that are not used to calculate your FICO Score

FICO scores consider a broad range of information on your credit report but the following factors are not considered as part of your score:

  • Your race, color, religion, national origin, sex, or marital status
  • Your age (though other scoring methods do consider your age)
  • Your income, salary, occupation, title, employer, or employment history
  • Where you live
  • The interest rates being charged on your accounts
  • Child or family support obligations
  • Rental agreements
  • Whether or not you are participating in credit counseling
  • Soft inquiries such as consumer-initiated inquiries, promotional inquiries, and administrative inquiries
  • Employment and insurance inquiries
  • Any information not in your credit report

How long is bad credit report information reported?

How long is negative information reported?

Although the most typical reporting time period is seven years, different types of negative information can report for longer. Here are the reporting time periods in more detail:

Seven Years

  • Late payments
  • Charge-offs
  • Collections
  • Foreclosures
  • Judgments
  • Settlements
  • Repossessions
  • Delinquent child support obligations


Technically, under the Fair Credit Reporting Act, if your report is being accessed for a loan or life insurance policy of $150,000 or more or for employment purposes for a job paying more than $75,000, the typical reporting periods do not apply. For those purposes the information can report forever. Fortunately, the credit bureaus generally adhere to the typical seven to ten year guidelines even for those purposes.


  • Chapter 7 bankruptcy can report for up to ten years from the date the bankruptcy was filed.
  • A Chapter 13 bankruptcy can report for up to seven years from the date of discharge or up to ten years from the date the bankruptcy was filed.

Defaulted Student Loans

Defaulted student loans can report for up to seven years from the date they are paid, the date they were first reported, or the date on which the loan re-defaults. These time periods are governed by the Higher Education Act. Under the FCRA there is no limitation as to the time periods student loans can report on your credit.

Tax Liens

Unpaid tax liens can remain in your reports indefinitely. Released tax liens must be deleted after seven years from the date released.

Credit inquiries can lower FICO Scores

Credit Inquiries

Credit inquiries occur when someone pulls your credit report. Inquiries are maintained in your credit reports for between six months up to two years depending on the type of the inquiry. Some types of credit inquiries will lower your credit scores and others will not.

Hard Inquiries

With a few exceptions noted below, hard inquiries that occurred in the last twelve months are calculated as part of your score. Any hard inquiries older than twelve months can remain on your reports for up to another year but are not calculated as part of your credit score.

Generally, hard inquiries are those that occur as a result of your attempts to obtain new credit. Hard inquiries can also occur as a result of skip-tracing efforts by collection agencies. Types of hard inquiries include:

  • Credit card applications
  • Auto loan applications
  • Mortgage applications
  • Personal loan applications
  • Student loan applications
  • Collection agency skip-tracing

Soft Inquiries

Soft inquiries are not calculated as part of your credit score. Types of soft inquiries include:

  • Consumer-initiated inquiries of their own reports
  • Inquries for promotional or “pre-approved” offers
  • Administrative inquiries from lenders with whom you have an existing relationship

30 Day Safe Harbor Period

Inquiries for mortgages, auto loans, and student loans are not calculated as part of your credit score if they are less than 30 days old.

45 Day Rate Shopping Allowance

Mortgages, auto loans, and student loans also benefit from a 45 day rate shopping allowance period in which multiple inquiries for the same loan type are calculated as part of your credit score but are only counted as one inquiry.

This allowance encourages rate shopping by consumers by not penalizing them for multiple related inquiries. Revolving credit applications do not benefit from this rate shopping allowance.

Employment, Insurance, and Utility Inquiries

Inquiries for employment purposes, insurance purposes, or to obtain utility services are not calculated as part of your credit score.

Credit Score Calculation: Minimum Requirements

To calculate your FICO credit score, your credit report must contain enough information on which to calculate the score. At least some of that information must be recently reported for a calculation to occur.

Minimum requirements needed to calculate your FICO credit score:

  • At least one undisputed credit account that is at least six months old
  • At least one undisputed credit account that has been reported or updated in your credit report within the past six months
  • No indication on the credit report that you are deceased

Simple steps to increase FICO credit scores

Increasing your FICO credit score

Most consumers can increase their credit score by taking these simple steps:

  • Pay installment loans, mortgages, and revolving credit on time
  • Keep credit card balances low—preferably below 10% of the available credit
  • Avoid applying for new credit
  • Keep older credit accounts open and current with low balances
  • Review reports periodically and repair any errors

Fake Debt Collection Call Scams

Phantom or fake debt collection telephone call scam

Fake debt collection call scams are becoming a serious problem for consumers across the country. Some of these calls are from collection agencies collecting actual debt but many of these calls are fake. Our investigations have shown that many of these fake collector calls originate after a consumer applies for a payday loan online or filed bankruptcy a year or two before the calls start. Even if you never applied for a payday loan or filed bankruptcy, however, you can still be a target of these scammers.

How to detect a fake debt collector

It is often hard to tell whether a collection call is actually from a debt collector or scammer. In both calls the caller will often have access to your personal information, such as your name, address, and Social Security Number. According to the Federal Trade Commission (FTC), a caller may be a fake debt collector if it:

  • is seeking payment on a debt for a loan you do not recognize;
  • refuses to give you a mailing address or phone number;
  • asks you for personal financial or sensitive information; or
  • exerts high pressure to try to scare you into paying, such as threatening to have you arrested or to report you to a law enforcement agency.

This list from the FTC is not completely accurate however. Many debt collectors collecting actual debt engage in the same conduct. One of the most egregious examples is threatening to have you arrested for failing to pay a debt. Some collection agencies collecting real debt might even threaten to revoke your driver’s license if you don’t pay. There are also a lot of real debt collectors that will give you a fake business name or refuse to give you any physical address to contact them in writing.

Never use a wire transfer to pay a debt collector

Another major red flag that can help spot fake debt collection calls is when the caller insists on payment through wire transfer or other untraceable payment method. Never pay any debt collector by an untraceable method. Even if the debt is legitimate you will have no way of proving you paid and no way of tracking the scammers if the debt was fake.

You should always be suspicious if anyone asks you to wire money or load a rechargeable money card as a way to pay them. There’s no legitimate reason for someone you don’t know to ask you to send money that by an untraceable wire transfer.

In other words, the FTC’s advice is a good starting point for detecting fake collection calls but there are too many similarities between fake collection scammers and abusive debt collectors to be sure without more digging.

How to handle a fake debt collector

Never give the caller personal financial or other sensitive information

Don’t give out or confirm personal financial or information like your bank account, credit card, or Social Security number over the phone. Scam artists, like fake debt collectors, can use your information to commit identity theft. They can charge your existing credit cards, open new credit cards, checking, or savings accounts in your name, write fraudulent checks on your accounts, take out loans in your name, or even completely drain your bank accounts.

Ask the caller for his name, company, street address, and telephone number.

Tell the caller that you refuse to discuss any debt until you get a written “validation notice.” The notice must include the amount of the debt, the name of the creditor you owe, and your rights under the federal Fair Debt Collection Practices Act. When you ask for this information some con artists will give you fake information while others will simply hang up. Search online to see if they provided real contact information.

If a caller refuses to give you all of his company contact information, do not pay!

Legitimate companies will always give you a way to contact them in writing. More importantly, paying a fake debt collector will not always make them stop calling. Once you pay a scammer, they will often call again and make up another debt to try to get more money from you.

Stop speaking with the caller.

If you have the caller’s address, send a letter demanding that the caller stop contacting you and keep a copy for your files. Under the Fair Debt Collection Practices Act, real debt collectors must stop calling you if you ask them to stop calling in writing.

Contact your creditor.

If the debt is legitimate – but you think the collector may not be – contact your creditor about the calls. Share the information you have about the suspicious calls and find out who, if anyone, the creditor has authorized to collect the debt.

Check your credit reports.

You should also check your credit report to see if the debt is real or not. Even if the debt is reporting on your credit, however, don’t pay the caller over the phone. Keep digging to be sure the debt is actually due. If you are going to pay it, be sure to pay the company that you actually owe. Just because someone tells you over the phone that you owe them money does not make it so. Demand that they verify the existence of the debt and confirm the payment history in writing before paying a collection agency. Remember, if they can’t prove you owe the debt, they can’t sue you to collect it.


These con artists can be extremely convincing on the phone. They make threats that sound official like threatening to arrest you, revoke your driver’s license, or sue you. But don’t pay over the phone no matter how scary or official they sound.

Do your homework. Pull your credit reports. Find out if the debt is real or not. Make the debt collector prove you owe the debt in writing. Any company that won’t give you written proof of the debt or provide you with contact information for the company, is a scam.

Fake collection calls are a lucrative business. Millions of consumers fall victim to these insidious thieves. Don’t be one of them. If you have already fallen victim to a fake debt collection call, contact an experienced credit or identity theft recovery lawyer to assist you.

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