In recent years, over 300 district attorneys' offices across the country have teamed up with debt collectors in order to collect bad debts. Debt collectors send out letters to individuals who have written bad checks, but those letters come on the letterhead of the prosecutor's office and threaten jail time if the checks aren't paid.
The letters also inform the debtors that they are required to take an expensive "financial accountability" class. When the debtors pay the bad checks, the prosecutor's office gets a small percentage from the debt collection company as well as a portion of the fee for the class. The debt collector gets a portion of the bad check amount as well as fees from the class.
Although writing a bad check is against the law, the threat of prosecution is unique in these situations, because the letter is sent out before the prosecutor's office has been able to determine whether a crime has been committed.
Some groups are challenging these tactics, claiming that debt collectors cannot threaten prosecution if a district attorney hasn't reviewed the facts of the case. The bad checks may have been a simple mistake rather than intentional fraud. According to district attorneys, they are simply partnering with the debt collection firms in order to be able to focus on more serious crimes.
The number of bounced checks written in the U.S. has fallen, as more and more consumers switch to credit or debit cards. In 2006, $182 billion worth of bad checks were written. In 2009, the number fell to $127 billion.
For consumers who most likely wrote the bad checks as a mistake and are having trouble coming up with the money to cover them, getting a letter from a district attorney can be scary.
If you are worried about debt collectors who are threatening you with prosecution, call consumer attorney Paul Mankin at 800-654-9517. He will help make the harassment stop. We will also explain how to stop harassing phone calls and determine whether the creditor contacting you has committed an FDCPA violation.