Business ProfileforMachol & Johannes LLC

The following describes a government action that has been resolved by either a settlement or a decision by a court or administrative agency. If the matter is being appealed, it will be noted below.

On June 7, 2021, in the State of Washington King County Superior Court, the State of Washington represented by the Washington Attorney General’s Office and Machol & Johannes, LLC a Colorado limited liability company; Machol & Johannes, PLLC, d/b/a Machol & Johannes LLC, a Washington limited liability company; Jacques A. Machol III, an individual; and Randall D. Johannes, an individual entered into a Consent Decree. 

The Decree orders Machol & Johannes to return approximately $475,000 to as many as 5,000 Washington consumers, and forgive up to $250,000 in fees and costs for hundreds more.  In addition, the debt collector will pay $414,000 to the Attorney General’s Office to cover the costs of the investigation.

The complaint asserted violations of Washington’s Consumer Protection Act and Collection Agency Act. Machol & Johannes failed to offer consumers legally required garnishment exemptions and unlawfully assessed fees and costs to consumers despite not collecting any money from them. The investigation also revealed that Machol & Johannes illegally operated in Washington state without a license for more than a year during 2011 and 2012.

As a result of the lawsuit, Washingtonians will receive full restitution or forgiveness for unlawfully assessed fees. Additionally, they will be fully reimbursed for money they should have been allowed to exempt from garnishment. In addition, Machol & Johannes will refund the portion of consumer debt it kept as payment for its services after garnishing Washington consumers during the time the company was unlicensed.

The company also is required to return money collected from one Washington consumer who received a garnishment notice during the garnishment moratorium that was put into effect due to the COVID-19 pandemic emergency.

The resolution will provide restitution to consumers and debt relief for several different violations. The exact number of impacted consumers is not yet available. In addition, some consumers may have fallen victim to more than one violation. Those violations include:

• Machol & Johannes failed to offer legally required garnishment exemptions to hundreds of Washingtonians. In Washington state, consumers are entitled to exempt some money from garnishment. Until 2019, Washingtonians had the right to protect $500 from bank account garnishments. For student loan debt, Washingtonians had the right to protect $2,500 from garnishment. Collection agencies are required to offer these protections to consumers via an exemption claim form before funds are garnished. As part of today’s resolution, Washington consumers who were not offered the exemptions will receive refunds for money collected up to the exempted amount. The Attorney General’s Office estimates this will total about $100,000.
  
• Machol & Johannes added fees to about 1,000 consumer debt accounts even when they did not collect funds. Washington law allows collection agencies to add fees and costs to consumer debts only when the debt collector is able to collect money.
• Machol & Johannes will return about $100,000 plus a total of about $32,000 in interest to consumers from whom the company collected these fees.
  For about 500 additional consumers whose debts have not been collected, the company will remove the fees from their outstanding debt accounts, amounting to about $250,000 forgiven.
• Machol & Johannes failed to obtain a license to operate as a collection agency in Washington from August of 2011 to October of 2012. As a result of its failure to obtain a license, Machol & Johannes will pay $238,000. The Attorney General will return that money to approximately 4,000 consumers whom the company initiated collections against during that timeframe.

Today’s resolution also requires Machol & Johannes to stop assessing fees on consumers from whom the company has not collected any funds, offer legally required garnishment exemptions to all consumers and include the legally required proof when submitting garnishment judgment applications to the court.

Eligible consumers do not need to contact the Attorney General’s Office or Machol & Johannes to receive restitution or debt relief. Refunds and relief of costs and fees will be determined by data contained in Machol & Johannes’ records.The Attorney General’s Office will mail checks and notices directly to eligible consumers.

For more information, please contact the Washington State Attorney General’s Office at  www.atg.wa.gov.