The New York Times recently reported that over 300 district attorney’s offices nationwide permit the use of their letterhead by debt collection agencies attempting to collect on bounced checks. The story has been picked up by the ABA Journal and other sources. The cases are not reviewed by prosecutors; their letterhead is used by the debt collectors, with the threat of criminal prosecution, to procure payment. The prosecutors receive a portion of the monies received. The rationale offered is that the prosecutors’ offices do not have the time or resources to deal with these lower-level crimes, and that the letters are sent only after basic collection efforts have failed. Various class actions challenging this practice are pending. The article cites one instance of a letter signed by a Santa Clara district attorney notwithstanding that the facts had not been reviewed by the office to determine if there was even a case.
In California, the practice reaches back to 1985, when the Bad Check Diversion Act created a misdemeanor diversion program that permits California counties to use contract agencies such as debt collectors to administer the program. In other states, like Michigan, the programs have been set up in the county prosecutors’ offices. The “positive” aspect of such programs is akin to pretrial intervention, where the bad check passers can avoid prosecution by participating in the program.
