by Deepak Gupta
Since its inception, this blog has covered the pernicious practice of prosecutors who rent out their name and authority to private for-profit debt collectors. As readers may recall, these debt collectors use official-looking letterhead to threaten consumers who have accidentally bounced checks for household purchases -- consumers are told they'll face criminal prosection and even jail unless they pay exorbitant collection fees. Our law firm recently filed a class-action lawsuit aimed at one such debt collector, known as Bounceback, Inc., under the Fair Debt Collection Practices Act and Washington state law.
Yesterday, the American Bar Association stepped into the fray. It's about time.
The association's Standing Committee on Ethics and Professional Responsibility issued ABA Formal Ethics Opinion 469, which concludes in no uncertain terms that the so-called "check diversion" programs violate basic standards of professional conduct.
In particular, the opinion shines a spotlight on the misuse of the lawyer's name and authority in facilitating these arrangements. The demand letters are effective at scaring consumers because they are sent on prosecutor letterhead and contain threats of criminal prosecution -- threats that no other debt collector could make.
But those threats are false. "Typically," the ABA's opinion explains, "no lawyer in the prosecutor's office reviews the case file to determine whether a crime has been committed and prosecution is warranted or reviews the letter to ensure it complies with the Rules of Professional Conduct prior to the mailing."
The opinion also rightly emphasizes that the demand letters at issue are especially deceptive "because they misuse the criminal justice system by deploying the apparent authority of a prosecutor to intimidate an individual." And, in addition to making misrepresentations, the letters involve prosecutors in aiding and abetting the unauthorized practice of law by private, for-profit collection collectors.
The prosecutor-debt collector arrangements are also "abusive" because they convey "the impression that the machinery of the criminal justice system has been mobilized" against the consumer, who is led to believe that he or she may face jail time unless the collector gets paid.