A national debt collection agency will have to return $475,000 to Washington consumers. State Attorney General Bob Ferguson successfully sued the Machol & Johannes agency for violation of Washington's Consumer Protection Act and state debt collection laws.
About 5,000 residents will receive some restitution.
Ferguson argued the Machol & Johannes violated state consumer protection laws, including those that keep debt collectors from zeroing out someone’s bank account.
“The resolution of this case will mean hundreds of thousands of dollars returned to thousands of Washingtonians, who frankly were the victim of a debt collection entity that did not play by the rules,” Ferguson said.
Consumers who qualify for restitution don’t have to take any action. The state will automatically issue checks.
In addition to the money to consumers, Washington will collect $250,000 in fees that will go to the Consumer Protection Division of the Attorney General's Office.
Ferguson said the case is a reminder that even when you owe money, you still have certain rights when someone attempts to collect on the debt.
The lawsuit came about in an unusual way. The attorney general filed the suit after being contacted by a King County Superior Court judge who was concerned about the large number of improper applications for garnishment coming from the Denver-based collection agency.