Respectfully submitted by Lawrence Rafferty (rafflaw)-Guest Blogger
I have to admit that I do not shock too easily. However, when I read an article this morning in the New York Times, I was taken back by the news. It seems that private debt collection companies across the United States have partnered with District Attorneys offices, to use the threat of criminal charges being filed against consumers in attempts to collect on alleged bounced checks to merchants. The fact that people were being threatened by collection companies did not surprise me. It was the fact that the veiled threats to the consumers were sent on District Attorney or Prosecutor letterhead that amazed me!
“They bear the seal and signature of the local district attorney’s office. But there is a catch: the letters are from debt-collection companies, which the prosecutors allow to use their letterhead. In return, the companies try to collect not only the unpaid check, but also high fees from debtors for a class on budgeting and financial responsibility, some of which goes back to the district attorneys’ offices.” New York Times
Maybe I am just naive, but does it make sense for the DA’s office to outsource the job of investigating and prosecuting alleged perpetrators of bounced checks to private companies who may or may not actually investigate the bounced check circumstances before “official” threats of criminal prosecution are sent out? Prosecutors involved in these arrangements claim that the process saves taxpayer money and saves time in their office.
“Debt collectors have come under fire for illegally menacing people behind on their bills with threats of jail. What makes this approach unusual is that the ultimatum comes with the imprimatur of law enforcement itself — though it is made before any prosecutor has determined a crime has been committed. Prosecutors say that the partnerships allow them to focus on more serious crimes, and that the letters are sent only to check writers who ignore merchants’ demands for payment. The district attorneys receive a payment from the firms or a small part of the fees collected. “The companies are returning thousands of dollars to merchants that is not coming at taxpayer expense,” said Ken Ryken, deputy district attorney with Alameda County.” New York Times
These private collection companies are requiring people to pay the money owed on the bounced check, along with an administrative fee and in many cases an expensive budgeting class. All under the cover of the official letterhead of the partnering District Attorney or State’s Attorney’s office. I can understand merchants looking for creative ways to recoup the losses they suffer from bounced checks, but attorneys representing consumers see the issue differently from the collection companies.
“Consumer lawyers have challenged the debt collectors in courts across the United States, claiming that they lack the authority to threaten prosecution or to ask for fees for classes when no district attorney has reviewed the facts of the cases. The district attorneys are essentially renting out their stationery, the lawyers say, allowing the companies to give the impression that failure to respond could lead to charges, when it rarely does. “This is guilty until proven innocent,” said Paul Arons, a consumer lawyer in Friday Harbor, Wash., about two hours north of Seattle.” New York Times
Are these “partnerships” between debt collection companies and District Attorney offices another example of the privatization of government duties? Do you think that prosecutor’s letterhead should be rented out to private companies to provide them with the appearance of governmental authority? While this type of arrangement was news to me, it isn’t a new process. It goes back to at least 2006 when Congress passed a law allowing District Attorneys offices to make these arrangements and consumers started complaining in 2009 as shown by this couple’s statements.
“Both acknowledge they wrote two bad checks, totaling about $200, as they were moving from Florida to Michigan in late 2007. The bad checks, they say, were mistakes. But nearly a year after they settled in a Detroit suburb, letters and phone calls followed from Florida. “They told me they were part of the attorney general’s office,” Michelle O’Neil told CNN. “And that was scary in the sense that I’ve never had any legal problems. I’m a teacher.” But the calls weren’t coming from a state agency. They were coming from a company hired by a Florida county prosecutor’s office to collect on bounced checks.
The firm — American Corrective Counseling Services, or ACCS — splits the money it collects with the prosecutor’s office. But it also makes money from financial management courses that people who wrote the checks are required by law to attend at their own expense. And the company’s contract with the prosecutor’s office states those classes are its “principal business activity.” ‘ CNN
My kids always tell me that I am behind the times, and I guess this years old issue slipped past me for several years. I think it may be time for Congress to take another look at the 2006 law that allows District Attorney offices to make these kind of arrangements. When the force of law is used to extract much more than just past due monies, then it goes too far. The governmental process of enforcing the law should never be privatized, in my opinion. Do you think corporations can be trusted to diligently review each bounced check to insure that their threatening letters on District Attorney letterhead is being sent to people who intended to bounce a check? What do you think?
Additional Sources: ProPublica; Fair Debt Collection Practices Act; Amazon AWS
feemeister, bettykath laughed @ what I said w/ derision. I asked legit questions about her knowledge on the THIS subject. I don’t purport to be the only one who “knows anything.” I simply want to know what the person who laughed @ me knows about THIS subject. If you’re honest, you would do the same if you were in my position.
Why does America still have checks?
We’re all slaves to the plastic companies here. Learned in Asia that the plastics take 6% off the top. Guess they do here too. Saves chasing bad checks for the businessman. Cost of business taken out of the consumers pocket.
Cash want get you a dime in rebate. What is this world coming to?
Do you still have dimes? Pennies? Is it a dollar bill economy now?
OH MY GOSH! I guess there’s just one person on here who has any experience or knows anything!!!!
I liked that “Pirates of the Carribean.” This money stuff is above
my head. If you attach something snappy like Pirates of the
Carribean, I get it. God help the agency that hires me.
bettykath, Besides your knowlede of those 2 cases what is your expertise? Have you worked for a DA? Have you had your own business? Have you ever been the victim of a bad check for goods or services? I said in my first comment I know collection agencies are souless. I get the sense you may be talking out of your ass. I hope not, and look forward to your credentials on this topic. Or is this just how you FEEL?
raff,
“it also makes money from financial management courses that people who wrote the checks are required by law to attend at their own expense.”
Someone who makes a mistake can be forced to pay for a class they don’t want to attend? Doesn’t sound right to me.
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nick,
“If these collection agencies are kept on a short leash, I find it acceptable.”
ROLFL, as if.
I know of two cases where the collection agency filed in court for a lien claiming personal service that didn’t happen. Defendant doesn’t show up b/c she doesn’t know it’s happening so a default judgement. She had receipts that showed the bill was paid. Lien shows up when she sells her house. Then the lawyer holds 2-3 times the amount of the lien for 4 or 5 years and charges her for the check minus the lien amount, plus fees when she complains loud enough.
It sounds like those same individuals go to Chief Justice John Roberts over the wonders of Obama’s great health care plan. Republicans really love it because corporations love it same as the reason for Democrats to love it.
In the end those budgeting class only suppose to teach individuals how wonderful the FDIC and Wall Street are as vehicles for saving, all whilst Americans watch their 401’s vanish due to “lip stick on the pig” kind of thing. At last, American is built on utter decent and fraud. It isn’t in god we trust, it’s in government corruptions we trust, because at long last they are expected to be corrupt and continually get away and even be rewarded for their acts of corrupt. It would not be the great ole US of A unless individuals are punished for wrong doing and corporations and US governmental officials never are punished for wrong doing.
At long last we have become Mexico but we just don’t know it yet. Perhaps we’ll have to borrow money from the Mexican drug cartels to be solvent. Oh wait, that US bank Wachovia has already done that.
rafflaw, In a perfect world I do. Being a realist, I think this is a practical solution, albeit flawed, and w/ a potential for abuse. If these collection agencies are kept on a short leash, I find it acceptable.
I have worked insurance fraud personal injury cases where it would be easily proven criminally w/ videotape I shot that fraud was commited. However, DA’s don’t want them even when they involve 6 figure claims. Their attitude is “Well, the sh@tbird isn’t getting any money out of this so that’s his punishment.” The same w/ arson for profit cases I’ve worked. They’ll usually only look @ them if there was an injury or death. There are exceptions because a fire, even if it doesn’t result in an injury, also costs taxpayerss money via the fire dept. costs. The other factor is arson is tough to prove criminally.
Every court in this country is listed as a business on Dun & Bradstreet. I’m sure the DA’s offices are for profit businesses too masquerading as a public trust.
Find your local court
http://www.dnb.com/businesslookup
Debtors prisons are supposed to be illegal in this country.
Thanks nick. Your comment on who is willingly defrauding owners should be the purview of the DA and the courts, don’t you think?
Bad checks really hurt small businesses, particularly in the midwest where it is still considered to be a primary way to pay for goods and services. Small businesses have a hard time getting local DA’s to file charges because of giving priority to more serious crimes. Having both worked for a DA, and having my own small biz for almost 30 years, I see both sides. I also have another perspective, having done collections on bad checks for an Italian restaurant owner I know. I did that when I first started my PI business and needed work.
Bad checks are a much different situation than someone who can’t pay their medical bills or who get in over their head w/ credit card debt. Are there folks who simply make an honest mistake..indeed there are. And you know what, those folks just require a call from the business owner and the check is quickly made good. These folks are the minority. The archetypal bad check is a person who willfully writes a bad check w/ NEVER having any intention of paying. They write them on closed acccounts or accounts that were opened for the sole purpose of writing bad checks. Seldom do they write one bad check, I would find many local merchants who also had bad checks from the same person I was tracking down.
Collection agencies are like insurance companies..souless. However, they are regulated. Do we want to pay more taxes to have an ADA and investigator to solely work on bad checks? I don’t. I don’t particularly like this arrangement, but I really don’t like people who willfully defraud small business owners more so.
Interesting topic.
Thanks for the company Dredd!
“Maybe I am just naive, but does it make sense for the DA’s office to outsource the job of investigating and prosecuting alleged perpetrators of bounced checks to private companies who may or may not actually investigate the bounced check circumstances before “official” threats of criminal prosecution are sent out?”
I must be naive too then rafflaw.
Polizeistaat! Whatever the police say, seems to be the “law.” Look at all our rights – that are no more. The police/government determine if you may protest, when you may protest )Tuesday between 3 & 5.) Look how they cleaned out the OWS protesters across the nation. The police have gotten $100 billion to protect “us.” Who are they actually “protecting”?
That should be the FDCPA!
feemeister,
this is going on all over the country. It is being done in Cook County, Illinois and in many states throughout the land. The amendment to the FDCA in 2006 authorized the practice, but I am not sure the Congressmen read this bill.
I am stunned! Letterhead is pretty sacrosanct in the agencies I have worked for. The SA’s office has NO way of knowing exactly what is going out under their name. I cannot even imagine they would allow this. Wouldn’t they be legally liable for anything that goes out under that stationery? I mean, if something wrong goes out, they can’t then claim it’s not their fault; not them. If they give permission and provide the stationery (or the template), it is THEM! It’s hard ENOUGH to control the attorneys who work under you and what they say! But non attorneys who do not know the law and are trying to get money out of people (whether legitimately or not) sounds just INSANE!
Is this going on all over the country?
Pirates of the Carribean have moved onto land in Florida.
The prosecutor just lost his/her “prosecutorial immunity” from the civil suit one would file against the collection agency and their agent (the prosecutor) for various civil charges. When one gets the notice, be the first one on your block to file suit first, before the collection agency and the pig letterhead man. If the debt has been satisfied then sue for extortion. It is a civil rights violation as well. Put the two defendants in the jurisdiction where you live, not back there in Florida-la-la land.