Washington State

Office of the Attorney General

Attorney General

Bob Ferguson


Machol & Johannes must also forgive an additional $250,000 in unlawfully assessed fees and costs

SEATTLE — Attorney General Bob Ferguson announced today that Denver-based collection agency Machol & Johannes must 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 to resolve Ferguson’s lawsuit over the company’s unlawful debt collection practices. In addition, the debt collector will pay $414,000 to the Attorney General’s Office to cover the costs of the investigation.

Ferguson filed the lawsuit against Machol & Johannes in King County Superior Court in April of 2020. In his lawsuit, Ferguson 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.

Ferguson began investigating Machol & Johannes after a King County Superior Court judge notified the Attorney General’s Office that the company had filed a large number of improper garnishment applications.

After receiving the referral, the Attorney General’s Office investigation uncovered the company’s additional unlawful practices, which included unlawfully assessing fees and failing to provide consumers with sufficient notice that they can protect a portion of the assets in their accounts from garnishment. 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.

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.

“Washingtonians who owe debts have rights — debt collectors aren’t allowed to take every penny you have,” Ferguson said. “Debt collectors must follow the law. This resolution will make Washingtonians whole, and assures that Machol & Johannes will play by the rules.”

Resolution details

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.

Eligible consumers do not need to do anything to receive restitution. The Attorney General’s Office and Machol & Johannes will identify eligible consumers, and the Attorney General’s Office will mail checks to them, accompanied by a letter explaining the resolution.

In addition to the approximately $475,000 in restitution and $250,000 in erased fees, Machol & Johannes will pay $414,000 to the Attorney General’s Office. The money will be used to cover the costs of the investigation, and to fund the continued work of the office’s Consumer Protection Division. The division is funded largely by recoveries, receiving minimal General Fund support.

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.

Thanks to legislation passed in 2019 — which Ferguson supported — consumers are now able to exempt up to $2,000 from garnishment for consumer debts in Washington state. To exempt the funds from garnishment, consumers simply need to check the exemption box on the form collection agencies are required to provide to them before garnishing funds.

In addition, a new bill passed this year by the Legislature will automatically exempt $1,000 of the allowable $2,000 for consumers without the need for them to claim the exemption. To claim the remaining $1,000 they are legally able to exempt, consumers must still check the exemption box on the form collection agencies provide and return it to the court and collection agency. Rep. Amy Walen, D-Kirkland, sponsored this legislation.

Assistant Attorneys General Matt Geyman and Amy Teng with the Attorney General’s Consumer Protection Division handled the case for Washington.

The Consumer Protection Division enforces the state’s Consumer Protection Act and other statutes to help keep the Washington marketplace free of unfair and deceptive practices. If you believe you have fallen victim to an unfair or deceptive business practice, file a complaint with our office at atg.wa.gov/file-complaint or by calling 1-800-551-4636.


The Office of the Attorney General is the chief legal office for the state of Washington with attorneys and staff in 27 divisions across the state providing legal services to roughly 200 state agencies, boards and commissions. Visit www.atg.wa.gov to learn more.

Media Contact:

Brionna Aho, Communications Director, (360) 753-2727; Brionna.aho@atg.wa.gov

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