Consumer complaint received 2018-11-24
Company: ZIONS BANCORPORATION
State: UT
Product: Debt collection
Sub-product: Credit card debt
Issue: Took or threatened to take negative or legal action
Sub-issue: Collected or attempted to collect exempt funds

Complaint:
Hi! 

Zions Bank has frozen or taken exempt VA XXXX funds from me for a second and third time in spite of knowing they are not allowed to do this. 

The latest action has cost me more than {$800.00} to date in snowballing late fees, returned payment fees, interest and other losses and charges that I will not recover from on a fixed income, and I will be legally homeless early in XX/XX/XXXX for a second time if they dont release the funds immediately and repay some of my losses. 

As you can imagine, this is also causing significant harm to my relationships, physical, and emotional health as a XXXX XXXX  XXXX veteran, a status they have been emailed proof of in XX/XX/2017. They are also very aware of my extreme budgetary constraints, as I sent them a detailed copy of my budget just days before they froze the funds, on the XXXX of this month. 

I should also add they have never even gone through legal process to try to get the funds. Ive never been served paperwork of any kind, and even if there were a court order, these funds would be protected as XXXX benefits. The account they are attempting to collect was written off by Zions Bank years ago, and only became late because of my XXXX, as they ( XXXX XXXX, collections department ) are aware. 

According to ConsumerFinance.gov, banks and credit unions are required to protect up to two months of VA or other XXXX benefits, no matter what. ( See CFPB link below. ) In my case as a XXXX XXXX XXXX veteran, my monthly VA benefits are {$2900.00}, so up to {$5900.00} is legally protected from any garnishment at any given time. 

Early this month, in an attempt to pay off a credit card that I use to pay all of my expenses each month, I deposited an amount representing roughly my entire VA income for the month of {$2900.00} plus a roughly {$2200.00} high interest payday loan advance ( at about 260 % ) on next months VA income into a Zions Bank personal account. The high interest loan was intended to be for only one day, as I was going to pay off the loan using that credit card the next day, which would have saved me from paying roughly {$150.00} in interest for the month. ( There is no room for interest or fees of any kind in my budget because of unusually high health care expenses not covered by the VA. ) Knowing I am a XXXX XXXX XXXX veteran as of XX/XX/2017 and having my monthly budget as of XX/XX/XXXX, on approximately XX/XX/XXXX or XX/XX/XXXX and again on the XX/XX/XXXX, Zions Banks Collection department for a second and then third time returned my credit card payment and illegally placed holds on all of these funds, causing significant problems with all of my finances and projected finances for the future, as I am not able to cover any of my other expenses including rent, phone, utilities, health related expenses, food, and more. I have no other source of income at this time, and my father is retired, so he is unable to help. I have exactly {$7.00} in another account, and a lot of people and personal needs like food asking for it. Thats it. 

On the XX/XX/XXXX, I provided a branch with a copy of the regulation that shows it is illegal to freeze or take protected XXXX funds. The teller temporarily unfroze the funds, then concerned she might be violating the banks interests, called the collection department who told her to freeze it again, in spite of warnings that there could be statutory damages for holding XXXX funds. Through a bank manager, the collection department told me to sue them. 

As Zions Bank has taken all of my funds other than the aforementioned {$7.00}, I am not able to personally bear the expense of a lawsuit, let alone buy food or pay for shelter, so I am asking the CFPB to intervene. ( If this doesnt work there might be contingency fee based lawyers who will help and take a longer time, by which time I am likely to be on the street for a  second time in the last three years, an eventuality XXXX payments and their protection are intended to avoid, but I am asking you first. ) If possible I would appreciate having my significant fee and interest losses recovered as well as any statutory damages related to Zions Banks multiple and repeated blatant violations of consumer financial protection law and medical expenses that have or will be incurred related to the substantial distress this illegal activity has caused me. ( Ive been averaging about 3 hours of sleep a night since the incident. ) XXXX is especially harmful to me because of a XXXX XXXX condition I sustained due to service in XXXX that has become progressively worse. Among other treatments, I need XXXX XXXX XXXX about every nine months that is not covered by the VA to be half way normal, and this incident is both aggravating the injury and making it less likely I will ever be able to afford it again. Through emails and phone calls to XXXX XXXX in the collections department, Zions is well aware of the condition, and that their past failure to forgive or settle the long since written off debt for an amount within reach ( perhaps {$500.00} to {$800.00} as a one time payment ) is also making it impossible for me to qualify for XXXX XXXX or any other credit that might cover it, which, by the way, is also why I had to use a payday loan to get the {$2200.00} to try to avoid {$150.00} in credit card interest. 

Some of the statutory and other recoverable damages I have referenced are listed here : XXXX XXXX XXXX https : //www.consumerfinance.gov/XXXX  Thank you for any immediate help and advice you can provide.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation