Bad Checks and Debt Harassment

In a disturbing trend for consumers, debt collection agencies are expanding their operations into collecting exorbitant fees on bad checks, regardless of the checks were actually fraudulent or merely banking errors. Accidentally overdrawing your account or writing a check that bounces is not hard to do; banks actually depend on this to make money (some $30 billion in overdraft fees, annually). But lately, district attorney’s offices are outsourcing “bad check” cases to collection agencies, where the harassment and excessive fees begin. Some district attorney offices decline to investigate bad checks; instead, they pass all complaints off to private debt collection companies. When a bounced check gets sent to a collection agency, there’s much more of a penalty than a $30 overdraft fee; people receive letters threatening felony charges and/or imprisonment, and demanding hundreds of dollars (for various made-up fees). A company called Corrective Solutions works with at least 140 separate district attorney offices across America; BounceBack and Check Diversion Program are two other players on this crooked field. When the companies are given a case, they use district attorney letterhead on their intimidating letters and scare people into paying inflated fees. Some companies also offer “voluntary” financial accountability classes for $175 apiece, listing a random P.O. box number to mail your check to. This unethical practice is unfortunately legal, sometimes. DA offices take a cut of the class fee for every person who signs up, while the private collection agencies do nothing to separate out of the cases of actual fraud versus math errors. People are understandably confused and intimidated by the collection agencies’ letters, and many just pay up for the bogus classes. The Fair Debt Collection Practices Act prohibits collection agencies from threatening people with jail time or claiming to be part of a governmental entity; but, in 2006, Congress made a loophole for collection agencies “working on behalf of law enforcement agencies,” and the scam was off and running. Corrective Solutions spent $600,000 in lobbying money to help push the loophole through, which now allows them to aggressively threaten consumers while working for prosecutor’s offices across the country—even after they lost a class-action lawsuit over the same deceptive practices before the law was passed (before, they operated under a different name, but the scam was identical). The 2006 legislation requires DA offices to have probable cause that a crime was committed before sending the case to collections; this provision is universally ignored.If a collection agency has harassed you, you may be entitled to money damages up to $1,000.00, based on the FDCPA, which has been around for almost 35 years. The FDCPA is a federal law that applies to every state. In other words, everyone is protected by the FDCPA. The FDCPA is essentially a laundry list of what debt collectors can and cannot do while collecting a debt, as well as things debt collectors must do while collecting a debt. Plus, the FDCPA has a fee-shift provision. This means the collection agency pays your attorney’s fees and costs. Founding attorney, Michael Agruss, has settled over 1,500 debt collection harassment cases. We want to help you, too.