Michigan Utility Customers Face 25% Wage Garnishments as Private Collections Run Rampant

Sharee B.

DTE Energy, one of the largest utility companies in the Midwest has created some practices that are keeping its customers in a form of what could be argued as a debtor's prison.

According to reports, the energy provider has been selling off its customer's old accounts to the lowest bidder, in hopes of getting a portion of what the original debt would payout. However, these transactions would come back to haunt the customer in ways that could impact their very quality of life.

The private collections company, Jefferson Capital Systems is considered one of the largest junk debt buyers in existence, and small detail in the regulations over how much oversight the Public Utility Commission has over its electric providers allowed a nearly $300 million dollar balance to be sold without objection.

" Jefferson Capital sued our client in District Court on an old DTE Energy debt for over $3,300." -Legal Representative, Collection Stopper

The debt consisted of the closed accounts for almost 300,000 residents which could range from hundreds to thousands of dollars in judgments for every person pursued in court.

How was DTE, the state's second-biggest utility provider able to broker such a deal? By selling the debt for 1.7% of its actual retail value with full collection rights.

Customers faced a myriad of economic hardships due to the judgments handed down from the thousands of cases filed daily, with most of them resulting in wage garnishments that deducted up to 25% of their paycheck each week.

Amid the lawsuits were ongoing utility bills that were switched into the names of relatives in some cases due to a lack of providers in the area and inability to pay off the old debts.

In a city where more than half of its population has relocated within the past two decades and median wages sit at $52,498 before taxes, a huge income hit is almost too much to bear.

Currently, Michigan offers a utility shut-off law that gives customers a 10-day notice before their utilities can be terminated for non-payment. However, with only one company to choose from depending on what part of the state a customer resides in, the cycle of debt lawsuits and shut-offs will likely continue to get worse.

Comments / 58

Published by

I'm a personal finance writer providing articles related to your finances,economic issues, and money-saving deals. Feel free to drop me a line anytime.

Texas State
29641 followers

More from Sharee B.

Comments / 0