The New York Times profiled a very concerning development in collection practices: collection companies have been making deals with some prosecutors’ offices to use official letterhead, seals, and signatures in an effort not just to collect on bad checks, but to make money on “administration fees” and “budgeting classes”, at times in amounts that dwarf the debt.
The NY Times describes the practice, which has expanded to over 300 local district attorneys’ offices (??!!!?):
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.
These letters imply to recipients that they could be prosecuted if they do not participate in the collection company programs. But in the vast majority of cases, no prosecutor ever looks at the debt or the letter before it is sent. For example:
“No one at the district attorney’s office reviews the cases” before the collection company sends out letters, said Priscilla Cruz, an assistant director in the Los Angeles district attorney’s office.
The prosecutor in a criminal case shall: (a) refrain from prosecuting a charge that the prosecutor knows is not supported by probable cause;
The letter example posted above implies that the collection company’s budgeting classes and restitution charges are part of a pre-trial diversion program. Diversion programs may involve deferral of prosecution, but always imply prosecution. The threat of prosecution from the district attorney’s office without determining whether there is probable cause may violate this rule.
In the course of representing a client a lawyer shall not knowingly: (a) make a false statement of material fact or law to a third person
Allowing private companies to put a letter on the district attorney’s letterhead, with the seal and signature of the office without ever reviewing the claim is making a false statement of material fact – it is material to know that no prosecutor ever looked at the claim. We expect more from prosecutors, bearing the full authority and power of the government, but when they sell their authority to private companies, they no longer represent the people in any sense of the word.
Edit: A post by a guest-blogger at Jonathan Turley’s site informs me that Congress passed a law in 2006 allowing these arrangements. So while legal, these arrangements are still unethical, in the broad sense of the word. We should expect more from prosecutors, who we count on to protect us from dishonest scams, not perpetrate them.
Further Edit: As with so many things, Simple Justice expresses the outrage much better than I can.