Prosecutors Outsource Collection of Bounced Checks
Florida prosecutors are implementing a new revenue raiser: retaining a collection agency to pursue consumers who write bad checks, reports CNN. Though in theory the program seems fiscally responsible and serves as a way to deter others from bouncing checks, in practice the execution leaves much to be desired, often capturing folks who simply wrote a bad check by accident.
The program works as follows. Florida prosecutors offices contract with the American Corrective Counseling Services (ACCS) to collect on bounced checks. ACCS splits the collection proceeds with the prosecutors' office. But ACCS also makes money from financial management courses that people who wrote the checks are
required by law to attend at their own expense.
As a result, ACCS has incentive to capture bad check writers as quickly as possible, before they can even make good on the check with a merchant. The article describes the case of Michael O'Neil, who bounced a $14 check to a drugstore. Although O'Neil tried to resolve the situation with the merchant, he was told that it was too late; the matter had gone to collection. The result? O'Neil's $14 check cost him $285, including the $160 class fee.
But the issue that has consumer groups up in arms about this practice is that prosecutors aren't just outsourcing collection, they're passing on their prosecutorial powers as well. The notice from the company states that "the State Attorney will not discharge the report(s) of criminal activity against you until all program requirements, including attending class, have been met." And when the company calls debtors, it holds itself out as an agent of the prosecutor's office. Deepak Gupta, a Public Citizen attorney in Washington, D.C., who is quoted in the article said it best: "[C]ompanies like ACCS are effectively renting out the prosecutor's seal to collect money on cases prosecutors would not otherwise pursue."
These types of actions weren't permitted until 2006, when Congress passed a law that permitted prosecutors to outsource collection to agencies. But those who voted for the legislation, including Rep. Barney Frank, D-Mass., said that they believed that the law was intended as a way to avoid criminal prosecution -- and not to pursue actions that would never have been prosecuted to begin with.
Posted by Carolyn Elefant on March 2, 2009 at 02:14 PM | Permalink
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