Sponsored by:

Comment, blog & share photos

Log in | Become a member
The Honolulu Advertiser

Posted on: Monday, November 19, 2001

U.S. attorney sues Calif. collections firm

By David Waite
Advertiser Staff Writer

A California collections agency is in trouble with the U.S. Attorney's Office in Honolulu for allegedly trying to charge a Coast Guard man and his wife a higher-than-allowed interest rate on debts the couple accrued before the husband enlisted in the Coast Guard.

Elliott Enoki, acting U.S. Attorney, said a federal lawsuit accuses Monterey Collection Services, of Oceanside, Calif., of failing to abide by provisions of the Soldiers' and Sailors' Civil Relief Act.

The law requires the interest rate must be lowered to 6 percent on debt someone has when he or she joins the military.

The suit is on behalf of a man assigned to a Coast Guard cutter in Honolulu. Before the man enlisted, he and his wife bought a time-share unit in San Francisco.

After the man enlisted, the collections agency demanded that he pay off the loan in full, hit the couple with a collection fee of more than $4,000 and refused to lower the interest rate from 15 percent.

The lawsuit seeks monetary damages, including punitive damages of more than $50,000 and asks that the collection company be made to review all of its accounts and to comply with the Relief Act with regard to all service members.

Collections company officials could not be reached to comment.