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U.S. Government to Pay $7.4 million in Debt Collection Class Action Settlement
Even the government is under attack for its collection practices. In a civil suit, the U.S. agrees to settle claims brought by veterans that it improperly intercepted other payments to offset debt run up on bases.
The United States will pay some $7.4 million to settle a class action lawsuit brought by military veterans over the government’s debt collection tactics in recovering money owed for on-base purchases.
More than 6,700 former members of the military will receive $10,000 each in the settlement. A Federal judge in San Francisco approved the settlement Thursday.
CORNERSTONE SUPPORT, INC.
We are the premier STATE LICENSING and COMMERCIAL INSURANCE provider to the ARM industry. We are a valued partner to 1,000+ collection agencies, debt buyers, attorneys.
At issue in the case was the government’s practice of “administrative offset,” or intercepting certain federal payments – like income tax refunds and social security benefits – to pay down other debts owed to the U.S. In the case, the lead plaintiff argued that the debt he incurred on a base in 1993 had reached the 10 year statute of limitations for the offset program before the government began withholding income tax refunds in 2004.
Julius Briggs, a disabled Army veteran, filed the case in 2007 after the U.S. had kept some $2,300 in tax refunds over the previous three years to pay down a $1,857 charge account debt he ran up buying uniforms and other items on a military base in 1993.
Once the class was certified, other veterans complained that the Army and Air Force Exchange Service (AAFES), which grants credit to military members for on-base purchases, miscalculated interest and fees and failed to send proper notices after they left the military. Many more also alleged that the offset was used after the statute of limitations had passed.
The court sided with the class earlier, agreeing that Briggs’ debt had passed the allowable time for the government to use the offset. The 10-year statute of limitations was lifted in 2008.
According to the Wall Street Journal, the case is among the first class actions ever to challenge the debt collection tactics of a federal agency.
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Comments
Comment from JN on January 29, 2010 at 12:54PM EST
Oh the irony!! It's ok for a consumer to run from debt until the SOL runs out, but a serviceman does it and they withold tax refunds and social security benefits. That is great!! If an agency tries to collect a debt that is out of statute our government wants to throw the book at us!!
Comment from CEO on January 29, 2010 at 4:51PM EST
As we do not adequately compensate our troops for laying their life & limb on the line, I really would not mind all 3 mil of them getting 10k christmas bonuses, annually.
But to select the dead beats and give them more than they lost is punishing tax payers who did not do anything wrong. And by not giving the same 10k to those who paid their AFEES bills, we are rewarding the bad behavior. NOT GOOD.
Comment from DONALD DALY on January 29, 2010 at 5:06PM EST
There needs to be some logic and common sense somewhere in the country. When did right become wrong? What qualifies each of the particpans to $10,000.00 of my money? When will the hoodlums stop being rewarded?
Comment from cjm608 on January 29, 2010 at 7:06PM EST
sol is sol. why don't you seem to understand this?
Comment from jwrDenver on January 30, 2010 at 7:31AM EST
The math won't add up... $7.4m / 6,715 indiciduals = $1,102 each. (OR) $10,000 x 6,715 individuals = $67.15m. Sounds like AAFES (Government) is doing the math!
Comment from Anonymous on January 30, 2010 at 11:38AM EST
Please check out www.armingheroes.org, a non-profit organization in our industry that is dedicated to helping U.S. Veterans in ways specific to our industry.
Comment from YEIDID on February 17, 2010 at 2:42PM EST
I think AFEES should be held accountable for not following the law. If you didn't send proper notification or collected after the 10 year period then let's just think, you didn't need the revenue that bad now did you. Military members stop accepting credit if you know you can't pay for it. I am a Vet as well so I know what types of things you can get on a AFEES card and most of it does not have to do with uniform items. I refuse to pay for LCD and clothing with my tax payer dollars for you.
Comment from Anonymous on June 21, 2010 at 6:06AM EST
You are missing the point. Most of us affected by the lawsuit had MORE than we owed taken from us via offset payments - in other words, a $500 debt, like mine, was 'paid' by the taking of my $1000+ tax refund, in its entirety, for 6 years in a row - meaning they (AAFES) took 12 times what I owed. Calls and letters never got anywhere. I am glad someone finally got this ripoff stopped - I paid my debt to AAFES many times over.
Comment from Anonymous on July 2, 2010 at 12:19PM EST
I can't find my letter stating when we're supposed to receive our portion of the settlement. Does anyone know? I thought the letter said August.
Comment from Anonymous on July 21, 2010 at 4:24PM EST
I recieved a letter telling me how much minus 20% for the lawyers. But it didn't have a disbursement date,
Comment from Anonymous on July 26, 2010 at 5:00PM EST
Does anyone still have the lawyer info? I have not received a letter. Was your disbursement amount $10,000 as this article states or what your paid beyond the 10 year mark as the orginal communicaiton stated.