The district attorneys, especially ones who are elected, make their merchant constituents happy, can devote their resources to serious offenses, and bring in extra revenue.

Here is something we need to be careful not to do in Connecticut.

When a customer’s check is returned for insufficient funds, what can a merchant do? First, the merchant might contact the customer demanding payment. Then, if the merchant gets no response, he might turn the matter over to a collection agency. He might also send the customer a notice via certified mail, return receipt requested, that payment was refused by the drawee. If the issuer then fails to make the check good within eight days, the merchant may refer the matter to the local State’s Attorney Office for prosecution under Connecticut General Statutes Sec. 53a-128.

It sometimes happens that an intentional check kiter has deliberately written a worthless check to defraud a merchant. But it’s more likely that the merchant was the victim of a consumer who was math-challenged or a negligent record keeper. Prosecutors have much more serious offenses to pursue than an accidentally omitted entry in a check register. Without a thorough investigation, it’s impossible to determine whether the bad check resulted from intentional fraud or an innocent mistake, even though both can be prosecuted and punished under Sec. 53a-128, if the issuer fails to make the check good after notice.

In many states, the merchant has another option. He can refer the matter to a debt-collection company that will send a notice on the stationery of the local district attorney threatening the check writer with prosecution if he or she fails to reimburse the merchant. An example of such a notice (taken from a recent Pennsylvania case) reads in part:



This Office has received a report(s) of criminal activity alleging you have violated Title 18, Section 4105 of the Pennsylvania State Statutes, Issuing a Fraudulent Check. If the check is less than $200, a conviction under this statute is a Summary Offense and punishable by up to a $300 fine. If the check is more than $200, a conviction under this statute is a MISDEMEANOR and punishable by up to a $5,000 fine and/or two (2) years in jail…However, you may avoid a court appearance by participating in the Luzerne County District Attorney Diversion Program.

There are two principal companies that use the method — CorrectiveSolutions, based in California, and BounceBack, based in Missouri. They return millions of dollars a year to retailers such as Safeway, Target and Wal-Mart. The usual procedure is for the merchant to send the check directly to the debt collector. No prosecutor reviews the case to determine whether or not a crime has actually been committed.

This debt-collection practice has spread to more than 300 district attorneys’ offices, perhaps because the collectors require the check writer not only to make the check good, but also to attend a diversionary program (as stated in the notice above) consisting of a class on budgeting and financial responsibility run by the debt collector which charges a fee as high as $180 for the class, some of which is returned to the cooperating district attorneys. The DAs, especially ones who are elected, make their merchant constituents happy, can devote their resources to serious offenses, and bring in extra revenue.

One might think this practice violates the federal Fair Debt Collection Practices Act (15 U.S.C. §1692f) which provides that “A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt.” However, there is an exception in §1692p. “[A] private entity shall be excluded from the definition of a debt collector. . . if a State or district attorney establishes, within the jurisdiction of such State or district attorney and with respect to alleged bad check violations. . . a pretrial diversion program for alleged bad check offenders who agree to participate voluntarily in such program to avoid criminal prosecution.” Nevertheless, consumer lawyers have challenged the practice in several courts, where the cases are still in litigation.

To date, it does not appear that any Connecticut State’s Attorneys have contracted to rent out their stationery to such debt collectors, and we hope they never do. It demeans their office and misleads consumers who may be economically hard-pressed, but not criminals who should be threatened with the power of the criminal justice system.•