WASHINGTON D.C. — After being locked out of her Wells Fargo account, “I’m left with no money,” Dee Hemsley said to WPTV.
She now wonders when she'll able to get her unemployment benefits.
She says they were wiped out of 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.
Certified FICO credit pro Paul Oster says a loophole in the new COVID-19 stimulus package is behind the change.
“The way it was passed under the budget reconciliation, these third-party debt collectors are coming after consumers,” he said.
Oster has helped people fight against third-party debt collectors for 16 years and is the President of Better Qualified, LLC.
“What happens is they will freeze and seize the bank accounts of the people that have the direct deposit for sure,” he said.
The only way a debt collector can do that is if a judge awards them a judgment against you which Oster says is pretty easy to do.
“If there’s been a judgment that’s filed against you you have to deal with that head-on. That’s a court order,” he said.
But many 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 get the stimulus check in the mail, he suggests signing it over to someone you trust so they can cash it for you.
“Everyone who’s in debt is poor and they’re depending on it to keep a roof over their head,” said Chakusola Guinn, who has dealt with a credit card and student loan debt for years.
It’s why Oster says a household should be run like a small business and people should cut the fat like monthly subscriptions until they have at least a six-month reserve.
“The one thing this pandemic showed us all, nobody had a runway to sustain the crash right?” Oster said. “Most people didn’t make it 30 days, 60 days, we were all in a crisis mode.”
He also says people should call their members of Congress and ask them to code the stimulus payments as benefits… so debt collectors can’t continue taking money from stimulus checks.
Wells Fargo told WPTV they are looking into Hemsley’s frozen account.