Unscrupulous Bill Collectors Illegally Freeze Seniors’ Social Security

Once again, the Alliance for Retired Americans has a great item in its weekly newsletter we want to share with you. 

While Big Banks get bailouts, seniors and the disabled are being robbed of their Social Security—which has expressly been exempt from attachment by bill collectors.  

According to a recent article in Yahoo! Finance, more and more seniors and people with disabilities are having their accounts frozen by bill collectors.…The freezes can leave seniors without access to their accounts for months at a time. Even in the best cases when the bank and creditors agree a mistake was made, it may still take weeks to fix the error. Additionally, some banks are profiting from non-refundable fees of $100 to $150 for freezing accounts, as well as overdraft charges when consumers, unaware of the hold, pay bills. The problem continues to grow with increasing consumer debt, and new technology making seizing bank accounts simpler and cheaper than ever before.  In September, the Senate Finance Committee held hearings on the issue, and is investigating the extent of this problem.

According to the Laura Rowley column on Yahoo! some seniors are going hungry or without their needed medicines for months at a time because it is so difficult to unfreeze their accounts. One 74-year-old grandmother discovered her bank account was frozen after her rent check bounced shortly after her Social Security check had been direct deposited. Capital One had won a judgment against her and had her account frozen for a $4,000 credit debt she had been trying to pay off for four years. They wanted to know what’s in her wallet.  

Unlike bank CEOs, nearly two-thirds of seniors depend upon Social Security for nearly all of their retirement income. But the same banking and financial industry CEOs who are finding new ways to strong arm senior citizens are after something much bigger than Grandma’s Social Security check—they want the whole Social Security pie.

The move to privatize Social Security may have quieted in the past couple of years, but that doesn’t mean it’s not still part of Wall Street’s agenda. Financial giants stand to reap trillions of dollars in fees and other expenses under the privatization schemes proposed by the Bush administration and others. On the other hand, Social Security recipients would be the big losers.

Previous Social Security privatization proposals pushed by the Bush administration would have cut workers’ guaranteed retirement benefits by more than $150,000 on average and would have taken back 70 cents in Social Security benefits for every $1 from those with the privatized accounts.

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