Consumer Protection Issues During COVID Pandemic
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While a crisis brings out the best in most of us, it brings out the worst in a minority of scammers. Be careful during this time of crisis, and watch out for:
- Fake testing for Coronavirus - tests are hard to come by, so if someone tells you they have some, you should be VERY skeptical!
- Cures for the coronavirus / COVID 19 - make sure you are only getting medical advice from a licensed and competent medical professional!
- Price gouging - $15 bottles of alcohol disinfectant that were $2 two weeks ago? That's called price gouging... and it's illegal!
- Undelivered Shipments. Many online sellers claim to have high-demand goods, such as hand sanitizer, toilet paper, cleaning products, and medical supplies. Scammers can set up an online shop under almost any name. Search online for the seller's name or company, phone number, and email address to look for reports of scams and bad reviews. If the sellers seems real, pay with a credit card and keep your receipts. Also, even if the seller is real, high-demand for home delivery has caused long shipping times, so check the estimated shipping times before you buy.
The Iowa Attorney General has committed to fighting scams and unfair consumer practices related to the coronavirus (read about it here). You can report unfair consumer practices to their office by filing a complaint with their office.
The Federal Trade Commission is also working on these issues, especially in regard to fake 'stimulus checks,' as well as other deceptive practices.
Government COVID-19 Relief Checks: If the government does send checks or deposits, it will NEVER ask you to pay fees to receive the money; it will NEVER call you on the phone to ask for your Social Security Number or bank account numbers. More Information from the FTC on fake check scams here, and general information about scams here and here.
Cars: Payments, repossession
Some auto-finance companies have started programs to work with borrowers affected by COVID 19 - a list of at least some of these borrowers appears here.
Garnishment of wages or bank accounts
The Governor's proclamation on April 24, 2020 that halted garnishments of wages and bank accounts expired May 27 2020 at 11:59 PM.
How does garnishment work normally?
Since the garnishment moratorium ended, normal garnishment rules again apply.
Dealing with a garnishment is difficult even in normal times, but can be particularly difficult in a crisis like the one we face today.
If your wages or bank account is hit by a garnishment, you can file a document called a "motion to quash." In this motion, you might be able to show that you have income that is "exempt" - in other words, protected by law. In most situations, the following income is generally exempt:
Wages, self employment earnings, retirement account disbursements, and pension distributions, according to the following chart
|Amount of weekly earnings (after taxes)||Max garnishment|
|Less than $290||$0 per week|
|$290 to $366||Wages - $290|
|Over $366||25% of earnings|
- Federal benefits like social security, SSI and VA pensions. These are automatically protected from garnishment, as long as you don't transfer them out of the account where they were originally deposited.
- Federal student loan disbursements
- Child support and alimony
- Earned Income Tax Credit and Additional Child Tax Credit
- Worker's comp
- $1,000 of any other money
The types of income listed above are not a full list, just the most common types of exempt income. In addition to telling the court in your motion to quash that you have these kinds of income, you can also ask the court under Iowa Code 630.3A to determine whether they should let you keep something not on this exempt income list because of "equitable factors."
For example, you have or an elderly parent children to support, someone in the household has a disability, or under the present circumstances that you need resources to hedge against the medical and economic uncertainties of the present pandemic.
Under the present circumstances, in some cases you may be able to ask for a complete stop to a garnishment under this provision.
Can creditors garnish my stimulus funds or unemployment?
Unemployment is always protected and is exempt from garnishment. Stimulus funds might be protected as a public assistance benefit.
In the words of the National Consumer Law Center, a national advocacy group for consumers, the federal CARES Act provides "less than minimal protections regarding credit reporting."
The only additional protection provided during this time is that, if a creditor works out some kind of arrangement with you related to a debt that is COVID 19 related, they have to continue to report your debt the same way they did before they worked something out with you during the state of emergency.
This protection extends from January 31, 2020 until 120 days after the federal state of emergency is ended. Also, this minor protection does apply when an account is listed in a credit report as "charged off." Here are some examples to help illustrate:
- You have a debt that was delinquent as of January 30, 2020, a day before the coverage period. This law does not require the credit reporting agency to do anything different, unless you actually bring your account current.
- You have a debt that becomes delinquent as of January 31, 2020. You are unable to work out alternate arrangements with your creditor - like a forbearance, modification, delay in payment, etc. The law does not require the credit reporting agency to do anything different than they otherwise would, and you will be reported as delinquent.
- You have a debt that was current before January 31, 2020 and becomes delinquent after that time. You work out a modification or temporary delay of payments or some other arrangements with your creditor. Under this new law, your creditor has to report this debt as current, not as modified, in a forbearance, etc.
Iowa Legal Aid Provides Legal Help to Low-Income Iowans
To apply for help from Iowa Legal Aid:call 800-532-1275.
- Iowans age 60 and over, call 800-992-8161 or apply online at iowalegalaid.org
- If Iowa Legal Aid cannot help, look for an attorney on “Find A Lawyer” on the Iowa State Bar Association website iowabar.org. A private attorney there can talk with you for a fee of $25 for 30 minutes of legal advice.
- As of March 18, 2020, our offices are closed for walk-ins until further notice, due to the coronavirus outbreak.
*As you read this information, remember this article is not a substitute for legal advice.