Attempting to Garnish Consumers’ Paychecks
Payday Financial LLC doing business as Lakota Cash and Big Sky Cash got caught red handed! It’s hard to believe companies would be this blatant in violating the law, in fact “many” laws. The FTC has filed action in US District court for these companies attempting to illegally garnish consumers’ wages forcing them to stop the challenged conduct pending trial.
The FTC is continuing to crackdown on scams targeting consumers in financial distress. The action states that these companies and others have attempted to garnish consumers’ wages without a court order, resulting in the defendants illegally revealing the consumers’ supposed debts to their employers and depriving consumers of their rights to dispute the debt or to make payment arrangements.
-In addition, they represented to employers that they were legally authorized to garnish an employee’s wages, without obtaining a court order,
-Falsely represented to employers that they had notified consumers about the pending garnishment and had given them opportunity to dispute the debt,
-Unfairly disclosed the existence and the amounts of consumers’ supposed debts to employers and co-workers without the consumers’ knowledge or consent.
Further, these companies required consumers to give their consent to having wages taken directly from their paychecks in the event of a default, in direct violation of the Credit Practices Rule.
And finally, they required authorization for electronic payments from their bank account as a condition of obtaining the loans in violation of the Electronic Funds Transfer Act and Regulation E.
This follows on the tail of debt collection companies and some creditors attempting the same “illegal” tactics.
It is important to understand that creditors and debt collection companies CANNOT garnish wages, bank accounts, etc. without first obtaining a court order. And prior to obtaining a court order the consumer MUST be notified (in writing) and the creditor must be able to PROVE that the consumer was, in fact, NOTIFIED.
Creditors repeatedly try this tactic because the majority of consumers don’t know their rights, and react in fear. We want you to know your rights!
Don’t be intimidated by a creditors threats and scare tactics. That is all they are until they act in accordance with the law.
If you have questions regarding this or other credit issues, contact our staff- (800) 805-8438.