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
nick,
I use our local post office when I mail packages. The clerks are always helpful and accommodating. I’ve never had a problem with packages getting lost, damaged, or not arriving on time.
It’s all part of a larger business that has nothing to do with protecting Main Streets small merchants.
Debtors’ Prison Is Back — and Just as Cruel as Ever
http://www.dailyfinance.com/2012/08/30/debtors-prison-is-back-and-just-as-cruel-as-ever/
Courts Should Stop Jailing People for Being Poor
http://www.aclu.org/blog/criminal-law-reform/courts-should-stop-jailing-people-being-poor
Elaine, For the most part I do. I never us the PO for packages, I pay bills via computer, and use email. That’s what many folks do now. FedEx has great employees and UPS good employees. Their service is far superior to the PO.
nick,
You can always send your mail via Fedex or UPS. I think their postal rates may be a little higher than the USPS though.
Yeah, I would sure miss the Post Office. Of course, if you sh@t canned the Post Office there would be a lot of entitled employees going postal. That would be the only real problem as far as I see.
If I write a check and pay by mail the recipient can credit my account when the check clears. When I buy grocieries and have eaten all the food by the time the check bounces then where does the store stand? They should stop accepting checks. Who is left in society who has to use them to buy groceries. If they have a bank account then they can go to the ATM in the lobby of the store and pay with cashola.
Elaine:
that is the concern I have as well. In my view the Postal Service cannot be fully contracted out without having a major upheaval of the nation’s commerce and operations, other operations are the same.
There are many situations where the gov’t is best to get out of, but core services are not one of them.
The reason is fluidity. If roadways for example were such that local gov’t abandoned its responsibility for public roads, and allowed a patchwork of private enterprises, all with different roads under different territories the result would be chaos in that different assessments, tolls, rules, and qualities would detract from roads just being a standard that could be trusted and not something where every trip would have to be planned for just to handle its navigation.
I actually am a person who believes in Public Utilities such as Electricity. Nearly all the public utilities in this state are such that the cost to consumers is substantially lower than with private, for profit utilities. This makes electricity more affordable and conducive toward residents and an attrraction to bring business into the area.
You are right Darren. A bad precedent is being made here.
Thanks AY.
OS,
You are lucky! You can’t trust tose insurance companies!
Canada
Darren,
“I would further add this sets a disturbing precedent if we contract out services which are by statute and definition roles of the gov’t.”
We have already privatized much of the military, a number of prisons in this country. We now have politicians who want to privatize the United States Postal Service, public schools, Social Security, Medicare. What next?
The Prosecutor’s Office in our county tried to implement a program for this with regard to UIOBC’s and NSF checks. The office partnered with some company that offered this check collection service and sent out information packets to all the LE agencies in the county (except WSP which does not handle this)
Essentially the program was such where the recipient of the check would agree to send NSF checks to this collection agency, operating under the purview of the Prosecutor’s Office for the same reasons as stated in this article. In fact, the Prosector (an elected office in WA) put his picture on the packet making almost in my opinion a PR campaign about it.
I reviewed the program and I refused to participate in it because I considered the program to constitue “Compounding” which is prohibited under state law. ( Compounding is generally where either the prosecutor or the victim agrees to accept something of value in exchange for not prosecuting a crime.) Essentially the program was that the prosecutor’s office would globally forego a criminal prosecution in exchange for participation in a payment program and the consideration, or thing of value, was the Prosecutor’s office would receive a cost savings from not having to prosecute the case (there might have been other consideration between the contracting collection agency but I was not privy to this)
There was universally no support of this program by any of the LEOs or LEAs in the area and it fell out of favor and was not adopted.
I further agreed it was greatly troubling to being this type of surrogate role of the demi-prosecutor that was this collection agency. I felt it would open up so many legal cans of worms with regard to jurisdiction, rights of the accused, colors of law, and other issues that the increased legal expense would overwhelm whatever benefit could be derived from it.
I also worked many check fraud cases during this time and the elements that had to be proven in any criminal case was the following:
1) The maker of the check had to have knowlege either the check was made when the account was insufficently funded. Negligence or recklessness was insufficient, the maker actually had to know the check would have bounced.
2) The maker had to knowlingly write a check on an account that she knew to be closed.
3) The maker had to knowingly use a check for which he was not an authorized signer on the signature card at the time of the issuance.
4) The person who wrote the check assumed the identity of another in making the check.
5) The check physically was a forgery and the maker knew this.
Situation 1) required a search warrant of the bank records and all statements and notifications made and actually read and received by the maker in order to gather evidence to prove situation 1). A person simply goofing up their account register had no chance of meeting this requirement. This was the hardest to prove a criminal intent and was the most work for an investigator. But most bad checks fall within this criterion. This situation is entirely civil in nature and should be handled by the merchant and the maker. The prosecutor’s office should not be invovled if no criminal intent can be shown.
Situation 2 with criminal intent as well as 3,4 and 5 have no buisiness being investigated by private agencies under the auspices of the Prosecutor’s office because they are felonies. Only prosecutors can provide information to the courts to charge a person with a felony and since the prosecution of a felony is costly, it typically will exceed the value of the UIOBC check and not be a defense to compounding. See http://apps.leg.wa.gov/rcw/default.aspx?cite=9A.76.100
I would further add this sets a disturbing precedent if we contract out services which are by statute and definition roles of the gov’t.
Is the DA paid by tax monies?
If so, isn’t this a tad icky in the use of government monies being shifted to private companies? And if the DA is funded by tax money….why would s/he be moonlighting for a private company?
I disagree with having to take the course but then I disagree that people who get speeding tickets should have to take a course. Everyone knows not to speed and everyone knows not to bounce a check.
Those classes serve no other purpose than to line the pockets of the contractor providing them.
Why do we need a license to drive a car?
Yo, Store Daddy. Put an ATM machine in the lobby of the Mall. Tell the check writers to go get cash. Or use their check/debit card. The card will tell all when they use it. Checks are outdated. If someone doesnt have a debit card or credit card that passes mutard then they will likely bounce the check or be over the age of 65 and remain clueless. I see this every day in the grocery store. Why is schmucko spending so much time writing the check and then taking my time while he fills out his ledger up that at the cahs register station while we are all waiting in line?
But that aside, if a District Attorney is distributing his letter head then he has no head. Off with the heads of these pirates!
THat District Attorney Be In Bed
With That Private Collector
Who Has a Fat Head.
They Ain’t Using Condoms
They Ain’t About Crimes
Its Porkin For Sure On The Public Dime.
Raff,
The thing that gets me with these types of tactics is when a bank closes a bank account because of insufficient funds….. And the returns the checks accounts closed….. This sets up a whole other set of criminal laws….
It is or was my understanding that the state of Michigan will prosecute the collection of nsf checks if and only if certain procedures are followed….. I have yet to see the prosecutor’s partner with collection agency’s… Not only does this set up the FDCPA but the States version as well…. Which used to be a little more stringent than even the Fed’s…..
Also if this is going on….. Then it also invokes the states FOIA…… Which I do not think they want to get into…. The states or the collection companies….
Good article by the way….
what is the difference between this and speed and stoplight cameras?
Bounced checks are a pain in the neck and people not paying are an even bigger pain.
You can sue someone to collect a debt and isnt that what this is really all about? The lawyers who would sue are losing revenue to the DA’s office.
Government is supposed to legitimately protect people’s property, when a person writes you a bad check they are stealing either your property or your time. Either way they are depriving you of a certain amount of time from your life. That is why we entered into a society with a government, to protect our rights.
If this facilitates the collection of debts and maybe even has a deterrent effect then why not let collection agencies threaten jail time? Most who have a collection agency after them are not going to pay anyway because they know for a small amount, less than say a few hundred dollars, it isnt worth an attorney or even a collection agency.
Bottom line, call the vender, apologize and get on a payment schedule if you have to. Most vendors would just be glad you were willing to pay for your “mistake”.
Feemeister? Honest? How naive Nick.
The fewer the anecdotes you know the louder you crow. I just can’t resist making up sayings.
ot saying that about BettyKath. Surprised her saying that. Maybe some people just can’t stand loudmouths. Any takers? I’m already registered as a member.
Gotta go snooze. Read you tomorrow. Bye y’all.
I must run an exceptional business. I have had a few bounced checks and only turned one over to the District Attorney’s bad check office over a forty year time span. It was for $500, and the guy did not respond to calls or a certified letter. If our DA’s office had been using that service, I would have just eaten the amount rather than turn it over to the check because IMHO, that would be unethical practice on my part if I did. Even if not technically unethical or illegal, it is still immoral.
The biggest check I ever had bounce was a payment from State Farm. It was for almost three thousand dollars and came back stamped NSF. The bank had tried to run it through twice on two successive days. State Farm eventually got around to making it good after a couple of weeks, but it was an “interesting” experience.
That was tree monkey I cited. Thanks again. Truer words….!
“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.”
——————-
Just in my taste. Thanks.
PS Did anybody follow the link to Keitel on RT. Can’t find it again.
He revealed before going to the center of world finance (london) that it all was rubbish flowing. Can’t do economy, but it was stuff that had been sold so many times that now what is flowing in the system was thousand times the world’s GDP. This is nothing more than we used to call vaporware, but money in this case. So if anybody starts calling for their money and there is a rush, then 1929 was a holiday in comparison.