State Prosecutors Give Bad Check Cases to Private Collectors, Share Money
Those who have written a bad check tend to pay up when they get a letter from a state prosecutor’s office.
However, in some states, such letters are actually being sent by private collection agencies, reports CNN.
Such outsourcing is controversial, because collection can take place without the government ever proving its case—or, in some instances, even reviewing the file carefully, the news agency writes. Meanwhile, any money the agency collects is split with the prosecutor’s office concerned.
In Florida, those accused of bouncing checks can be required to take a consumer education class as part of a settlement with a private collection agency. For Michael O’Neil, that meant that a $14 bad check he wrote to a drug store in the state eventually cost him $285, including a $160 class fee.
The Public Citizen consumer watchdog group has filed suit in California, Florida and Indiana against the American Corrective Counseling Services collection agency, contending that ACCS is violating the federal Fair Debt Collection Practices Act by collecting debt on behalf of prosecutors without establishing probable cause.
Attorney Charles Jenkins of ACCS says probable cause “is already established because of what the prosecutor requires of the submitting merchant.” That is, an affidavit stating that the check bounced and describing the efforts made to obtain repayment, CNN reports. Thus, when a letter is sent by ACCS, “it is already a matter for the local prosecutor,” he says. And the form letters ACCS sends have been approved by prosecutors, according to court records.