You will want to bounce somebody after seeing this:
"To the district attorneys, the bad-check programs appeared to be a relatively painless and inexpensive way to dispense with low-priority cases, while helping businesses get the money they are owed.... In return for giving the contract to the debt-collection companies, the district attorney’s office usually gets a small commission"
So whether its tax loot in the form of corporate welfare or acting as a collection agency, the state isn't serving you, consumer. It's $erving itself as it $erves bu$ine$$.
That's not to say I advocate passing bad checks, not at all. What I object to -- once again -- is where government spends it resources against theft and other things. Big banks and wealthy elite get away with ma$$ive fraud and nothing is done; financially-strapped American passes a bad check and the authority of the state is behind the private collection agency.
"Facing questions, DAs suspend outsourcing of bad check cases" by Colman M. Herman | Globe Correspondent, April 14, 2013
The letter from the local district attorney would make anyone shudder.
It says “Official Notice — Immediate Attention Required” and comes on what appears to be official stationery, with the signature and seal of the district attorney. The sternly worded four-page letter accuses the recipient of passing a bad check in violation of Massachusetts criminal law....
Not only is the recipient told that he has to make good on the check in order to avoid a criminal record, he also needs to fork over anywhere from $120 to $235 to take a class on “financial accountability,” along with a $25 return-check fee.
What the recipient may not realize is that the letter was not sent by a district attorney, but by a private, unlicensed debt-collection company under contract with the district attorney. That fact is either not mentioned at all or only inconspicuously disclosed.
Also see: Sunday Globe Special: Lip-Smacking Debt Collectors
I thought Obama was your friend, kids. Why didn't you get a bailout like the banks?
Until recently, six of Massachusetts’ district attorneys — including Suffolk County’s Daniel Conley, a Boston mayoral candidate — were engaged in such contracts, allowing the companies to use official-looking letterhead as part of a venture that critics say blurs the lines between government and private interests.
They aren't blurred anymore. There is no more line! Corporations and wealthy individuals control this government.
Last week, six months after the Globe began asking questions about the programs, which are not specifically authorized under state law, the district attorneys revealed that they had terminated or suspended their contracts with the companies over the course of the last two months.
The district attorneys reiterated their belief that the programs were a legal and effective way to handle bad-check cases, but said they would seek legislation to explicitly authorize their use.
Conley, as well as the district attorneys of Middlesex, Norfolk, and the Cape and Islands, used Corrective Solutions, a company that encountered class-action lawsuits for similar programs in other states. The Northwestern and Bristol district attorneys used BounceBack, a smaller company that employs many of the same practices.
A four-month Globe investigation into the relationship between the district attorneys and these collection companies, and the debt-collection practices in which they engage, found that:
■ The two companies are not licensed to operate in Massachusetts – a standard requirement for debt-collection companies.
■ They engage in collection practices that many argue could run afoul of state and federal debt-collection laws, including the questionable use of the official-looking stationery and the use of envelopes that make it clear that the letter pertains to debt collection.
■ Most of the district attorneys appear to have delegated their “prosecutorial discretion” — the decision on which cases to pursue — to the private debt-collection companies.
After months of the individual district attorneys vigorously defending their bad-check programs to the Globe, the Massachusetts District Attorneys Association issued a statement last Thursday on behalf of the four district attorneys doing business with Corrective Solutions, saying they were terminating the programs with the companies out of “an abundance of caution.”
Last week, the Northwestern district attorney’s office told the Globe that it has ended its agreement with BounceBack, while Bristol County said it has “suspended” its program with the company.
“I inherited this program from the previous DA,” said David Sullivan, chief prosecutor in the Northwestern District. “When I took a look at the letter that goes out, I didn’t feel it was appropriate because it was giving the erroneous impression that it was being sent by me, as opposed to BounceBack. So I pulled the plug.” Sullivan said even if the authorizing legislation passes, he will not reinstitute the program.
The district attorneys association declined repeated requests for a copy of the legislation they are seeking.
“It looks like the DAs are looking to conform the law to their questionable practices, rather than conform their practices to the law,” said Edgar Dworsky, a former Massachusetts assistant attorney general in consumer protection and founder of consumerworld.org. “The last thing these law enforcement agencies should be doing is lobbying the Legislature to make their programs exempt from the debt-collection rules that everyone else has to follow.”
Why does that look ILLEGAL to me?
Of course, when the state does it, it is not illegal.
To the district attorneys, the bad-check programs appeared to be a relatively painless and inexpensive way to dispense with low-priority cases, while helping businesses get the money they are owed.
“It’s hugely beneficial to taxpayers because we as prosecutors can then assign resources to more violent crimes and save taxpayers thousands of dollars every year’’ by diverting cases out of the criminal justice system, said Gerald Stewart, second assistant district attorney in Suffolk County.
Stephanie Guyotte, spokeswoman for Middlesex District Attorney Gerard Leone, said, “Those who have committed a crime of larceny are given the opportunity to not be criminally prosecuted, while the victim merchants have the opportunity to have the matter addressed in lieu of filing a criminal complaint.”
Oh, thank you, thank you.
But consumer advocates argue that the arrangement allows for-profit companies to prey on alleged bad-check writers, using the guise of official business for private gain.
“I would be surprised if there were not a disproportionate number of low-income, less sophisticated people who get these letters,” said Nadine Cohen, managing attorney of the consumer rights unit at Greater Boston Legal Services.
Oh, me neither. In fact, I'll bet they are the only ones getting them. So who showed theirs to a Globe person?
The companies themselves can reap enormous profits. On average, bad-check writers were paying back about double the face value of the checks they bounce. Grouping together the four district attorneys for which sufficient data were provided (Suffolk, Middlesex, Cape and Islands, and Northwestern), Corrective Solutions and BounceBack collected and returned $103,216 to merchants. For their efforts, they received $107,186 in fees in 2011, of which $8,735 went to the district attorneys.
That amounts to a commission of about 104 percent, far higher than the 15 percent traditional debt-collection companies generally receive on the amount returned to merchants, according to ACA International, a trade organization for the debt-collection industry.
Corrective Solutions, by far the larger of the two companies, has previously run into trouble in other states due to similar practices. The firm, operating at the same location with the same staff, but with different ownership and a different name, filed for Chapter 11 bankruptcy in 2009, according to Delaware court records, to avoid four class action lawsuits alleging debt-collection wrongdoing involving over a million consumers.
I'm so glad Massachushitts is so progwessive!
Another class action lawsuit, with roots in California and Pennsylvania, is pending against Corrective Solutions, alleging many of the same kinds of activities that are going on in Massachusetts.
With both companies, the program has worked in essentially the same way. Merchants contact Corrective Solutions or BounceBack with the names of people who have allegedly written bad checks and have not responded to initial warnings. The companies then send out the threatening letters demanding payment. In most cases, this is typically done without first consulting with the district attorney’s office.
If the initial contact doesn’t achieve the desired results, there’s a series of up to five follow-up demand letters of increasing intensity, plus, in some cases, phone calls.
Good thing we don't have thugs in AmeriKa, huh? It's just the Chinese and other bad people in the world.
In return for giving the contract to the debt-collection companies, the district attorney’s office usually gets a small commission based on the amount collected. They also save money by not having to pursue the cases themselves.
Both Corrective Solutions and BounceBack declined to be interviewed for this story.
In Massachusetts, as in many other states, if a person writes a bad check, it is only a criminal act if he or she intended to do so. Being a bad bookkeeper doesn’t count.
David Traub, spokesman for Norfolk district attorney Michael Morrissey, is quick to point out that the check writer would have received two notices regarding the bad check — from the bank and from the recipient — before being contacted by Corrective Solutions. “Intent does not need to be formed at the time the check is written,” he said. “It can arise when one decides to keep what they know they have not paid the agreed price for.”
Both Corrective Solutions and BounceBack seek to return 100 percent of the merchants’ losses. Only four of the counties – those working with Corrective Solutions — provided data on the amount they had collected for businesses, which amounted to over $1 million representing over 27,000 bounced checks as of last September.
Matthew Connolly, former deputy district attorney in Norfolk County under William Delahunt, said district attorneys are abdicating their responsibility by enlisting in the bad-check programs. “By doing so they are enriching a private company while intimidating people wrongly and charging them exorbitant fees,” he said. “It’s outrageous.”
I can see why government feels right at home working with them.
Paul Arons, the lawyer who has brought class action lawsuits against Corrective Solutions, called what the district attorneys were doing “unethical.”
“Their letters come on letterhead from the district attorneys. That’s a lie,” Arons said. “They’re not from the district attorneys. . . . What the DAs are doing is renting out their stationery.”
Traub disagreed. “It is not our stationery and importantly the letters clearly state [the program] is being operated by a third party,” he said. Corrective Solutions disclosed this at the bottom of the letter’s first page; BounceBack made no mention that a third party is involved. Either way, critics argue that a fine-print disclosure buried in the letters cannot overcome the impression created by having the district attorney’s name, address, and official seal at the top.
Arons said it is also disingenuous to threaten check-writers with prosecution. “It is rare that anyone ever gets prosecuted for a bad check,” he said. “You don’t even have to attend the classes as long as you make good on the check.”
Then all that garbage above about saving taxpayers money, blah, blah, blah. I suppose that's all needed to pay the pension tabs of hypocrites.
Most of the district attorneys involved in these programs do not, as a matter of policy, prosecute cases for checks of around $200 or less. (The average bounced check is for about $70.) But even when the checks are for more than that, the DAs rarely prosecute.
In Middlesex County, for example, not a single case referred from the bad-check program with Corrective Solutions has been prosecuted since its inception in 2005. The same is true for the Norfolk bad-check program, which started last year. Of the 104 cases that have been forwarded by Corrective Solutions to the Cape and Islands DA for prosecution since the bad-check program was instituted in 2005, 75 percent have not been prosecuted.
The other district attorneys did not provide prosecution data.
Scott Harshbarger, a former Massachusetts attorney general and Middlesex district attorney, defended the programs. “You’re a new DA and you come in and somebody says, ‘Look, small businesses are going to be happy with you. You’re going to divert a lot of cases out of the system.’ It’s a ‘no harm done’ program,” he said.
Cases that wouldn't be prosecuted. So whose paying you now, $cott?
Related: Globe Too Harsh on Chelsea Slum Lord
Yeah, maybe I'm being too harsh on Scotty.
Attorney General Martha Coakley, another former Middlesex district attorney, actually initiated that county’s bad-check program with Corrective Solutions in 2005. Coakley, through her spokesman, declined requests for an interview.
(Blog editor's chin drops to chest as he sobs. She caved to the federal government and let banks off the hook, is filing briefs at the Supreme Court on gay marriage, and well, never mind.... )
The retailers that benefit from the program had nothing but praise. “Like all supermarkets, we operate on a very small margin,” said Big E’s co-owner Michael Superson. “So we’re very grateful to have the program available to us.” Some of the large retailers that participate in the program are Walmart, Best Buy, Lowe’s, and Staples.
Yes, fellow Massachusehitts citizen, the state is working for them.
The biggest beneficiaries, however, are the debt-collection companies. Besides the class fee, which ranged from $120 to $235 depending on the county, a wide array of numerous other fees may be imposed on the alleged bad-check writers, including convenience fees, late fees, and rescheduling fees.
You are BETTER OFF USING JUST CASH!
Some of the district attorneys emphasize that participation in the program is voluntary. Technically, the recipients are being invited to participate in a program if they want to avoid the listed penalties; they are not officially being mandated to participate. But advocates say its voluntariness is illusory.
Dworsky, the former Massachusetts assistant attorney general in consumer protection, said, “How can you call a program voluntary when people get notices that say things like, ‘Warning — third notice of failure to comply?’ That doesn’t sounds terribly voluntary to me.”
Another focus of critics is the type of envelopes the companies use that show the words, “Bad Check Restitution Program” or “Check Enforcement Program,” through the return-address window.
“One of the cardinal rules of debt-collection law, both state and federal, is the prohibition against telling third parties about a debt, including an explicit ban on using envelopes which disclose that it is a communication relating to a debt,” said Dworsky.
In Massachusetts, the Division of Banks licenses and regulates debt-collection companies, while regulations issued by the attorney general cover entities such as retailers collecting money owed to them.
Neither Corrective Solutions nor BounceBack is licensed by the Division of Banks.
As of last October, the Division of Banks was unaware of the district attorneys’ bad-check programs, and declined to say whether its regulations cover these companies.
By last week, nothing had changed. “It’s a new industry in terms of my familiarity with it,” said banking commissioner David Cotney. “So I can’t give you an opinion as to whether or not these companies should be licensed.”
Harshbarger, who supports the DA programs, has no such reluctance, saying he believes they should be licensed by the state. “Of course I do,” he said. “I think it is appropriate there . . . be responsible state regulation and oversight.’’
After a strong lobbying effort by proponents of the bad-check programs, and despite the opposition of prominent consumer advocacy organizations such as Public Citizen and the National Consumer Law Center, an exemption was added to the federal law for debt-collections companies working on behalf of district attorneys.
Former US representative Barney Frank, who was on the House Financial Services Committee at the time, supported the exemption because, he said, he was sold on the notion that the program would allow people to avoid a criminal record, and the National District Attorneys Association lobbied hard for the exemption. ProPublica reported that Corrective Solutions also fought for the exemption, spending over $660,000 lobbying Congress.
And remember, Barney Frank was touted as the consumer's best friend when he was in Washington. Turned out he was more for the banks, but you would need to type his name into my blog search for more.
That exemption, however, is contingent upon the programs meeting certain criteria. The companies must not be able to decide which people likely violated the law and which cases should be pursued. This function, known as prosecutorial discretion, is deemed to be the role of the district attorney.
But in Massachusetts, most bad-check cases were not prescreened by the district attorneys.
Stewart, the Suffolk County assistant district attorney, conceded that he reviewed only 20 to 30 percent of the cases at various stages after merchants submitted them to Corrective Solutions. Bristol County reported that it reviewed “some of the individual cases,” but did not provide data. The Northwestern district attorney’s office says it did an “initial review” of each case for probable cause, but also did not provide data. The other district attorneys did not respond to a request for information about prescreening.
These types of bad-check programs may be poised to face increasing scrutiny.
There are many who believe that the newly formed federal Consumer Protection Finance Bureau should take a look at them. “This is the very sort of thing that the agency was created to deal with,” said Deepak Gupta, a former attorney with Public Citizen in Washington, D.C., where he was director of the Consumer Justice Project.
Cohen of Greater Boston Legal Services is concerned about the legislation the district attorneys will be filing. “If they continue the programs in their current form, we would, on behalf of low-income consumers, strongly oppose the legislation,” she said. “And if we have clients who were harmed by past behavior we would consider seeking redress.”
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