Making Money on Bounced Checks

CNN is reporting here on a program under which county prosecutors turn over bounced check matters to American Corrective Counseling Services (ACCS), which then requires the consumers who wrote the checks to pay to attend ACCS classes.  The articles describes how a bad $14 check ultimately cost a consumer $285, including the $160 class fee.  My co-blogger Deepak Gupta is quoted in the story, and Public Citizen has filed cases charging that the practice violates the Fair Debt Collection Practices Act.  (Hat tip to Kristie Kline).

Update: ProPublica, which co-produced the CNN story, has a more detailed report on their website.  The Consumerist discusses the story here.

Comments

[Fred]

Classic example of what happens with too much government. Is this not "transparent" to everybody?

[David]

I am so in favor of these people having to "pay the price" of writing bad checks. People do not write bad checks and no know it. Period. If they do, then they should be required to pay the price... and next time, they will stay on top of their wrongdoing perhaps.

When people like this do wrong, it is like a shoplifter... we all pay the price. What they did is illegal. Period.

I have no empathy for anyone who does this. I can keep from doing it. So should others.

[Rob Catron]

The utter stupidity and archiac mentality of our banking system never ceases to amaze me. Paper checks could have been 99% eliminated 10 years ago. There is NO reason for the idea of "bouncing a check" to even exist in 2009 because the balance can be checked and the money transferred in milliseconds, so the check (paper or electronic) could be denied upon deposit with no harm done. When I say "can" I mean if the banking system stopped using the 1960's outdated ACH technology, and actually IMPROVED their system to the state of the art. Oh no, wait, then they would not be able to collect their obscene bounced fees, and now their "class fees", etc. as they have done with these honest customers. I forgot, it's all about the banks making as much money as possible and screwing over everyone else. And by the way, I deposited a perfectly valid line of credit check into my checking account recently and it bounced even though I had enough credit limit to cover it. The lending bank, M&I just decided that, even with their 1.7 BILLION dollar bailout, they just couldn't risk actually allowing me to USE the credit line they had ALREADY given me, even though my credit score hovered between 790 and 820, and their was NOTHING bad on my credit acore at all. And you wonder why banks are failing? And do you think the bank still charged me the bounced check fee? You already know the answer.

[Bill]

This stupid couple. Did they think that it was free money and obviously they tried to get away with it as long as they could knowing they were located in another state.

Not feeling sorry for them at all. Matter of fact they got off lightly.

Ignorant to the max! I would have turned that 200 USD into 2000 USD penalty and interest.

[Jeff]

I'm so proud to live in Florida! SWEET. What you guys thought you could get away with Kiting checks? $14 or $.14 you wrote the bad check, now shut your pie holes and pay the fees for your own careless irrisponsibilities. I'm glad you got thumped by Florida's Attorney General for skipping out on your checks. The system worked perfectly.

[Jeff Sovern]

Interesting comments. Those of you who think drawers of bounced checks should pay substantial fees, do you also think that those fees should be paid to private companies unconnected to the payee of the checks?

[DG]

I also wonder whether those same commenters would have any problem with employing the machinery of law enforcement for other types of purely civil debt collection: Should we threaten people who haven't paid their credit card bills with criminal prosecution and jail? Would you support bringing back debtors' prisons?

And does it matter to you that the threats of prosecution are demonstrably false--that, as the ProPublica story reports, this company is threatening to prosecute people who have written checks under $100, despite an official policy that the prosecutor's office will not prosecute such cases?

[keith]

hah. couldn't say it better DG.

[mommymakingmoney lei]

not feeling osrry to them. it has been said that the end justify the mean. but it is wrong!