The Secret Ties Between Debt Collectors & DAs

Consider what's happening here. The debt collection companies are using the letterhead of the prosecutor's office to threaten consumers with criminal prosecution and possible jail time. In reality, they're in no position to back that threat up -- but from reading the letter, the consumer has no way to know that. The truth is that in the vast majority of cases, the prosecutor's office has no idea when these letters are mailed or who is receiving them, and has conducted no investigation to determine whether the claim of unpaid debt is actually true. Thus, the debt collectors are apparently mailing official letters without effective oversight -- and often without even having the evidence they would need to prove that the recipients actually owe the alleged debts. In short, no case.

"I would say that roughly 90 percent of the credit card lawsuits are flawed and can't prove the person owes the debt," Noach Dear, a civil court judge in Brooklyn who sees up to 100 such cases a day, told The New York Times.

This is, indeed, outrageous. To have prosecuting attorneys renting out their letterhead to private companies at all diminishes their office and, at the end of the day, betrays the public trust. To do this without weighing the merits of each individual case betrays the fundamental American ideal of due process and turns the phrase "innocent until proven guilty" on its head. Finally, to allow private companies to use the power and prestige of public office to coerce consumers, using the fear of criminal charges and imprisonment to bully them into compliance -- well, that is so clearly abusive that it's hard to imagine how anyone could defend it (not that they haven't tried).

When questioned, the prosecutors retort that renting out their stationery lightens the taxpayers' burden by raising money (albeit it blood money) for their own cash-strapped operations while keeping bounced-check cases from clogging the courts. "I view it as quite a win-win," Scott D. Shellenberger, Baltimore County State's Attorney, told the Times. "You aren't criminalizing someone who shouldn't have a criminal record, and you are getting the merchant his money back."

In fact, it's a lose-lose-win. Consumers lose by getting intimidated into spending their limited funds on bogus financial education classes. Prosecutors lose clout and dignity. The only winners here are the debt collectors, who win their money and their fees no matter the impact on consumers or the justice system.

Now, I'm more sensitive than many to the needs of our outgunned, overloaded, underfunded justice system. As the former New Jersey Director of Consumer Affairs, who worked in the Office of the Attorney General, I've seen first-hand that for too many fraud victims -- whether consumers or businesses -- justice delayed is justice denied.

In this case, however, the prosecutors' argument is as disingenuous as the letters themselves. A minority stake in a $170 fee doesn't generate much in the way of revenue -- and whatever money it does generate cannot possibly be enough to offset the harm done to consumers who may be getting railroaded by false collection notices. Add to that the money some prosecutors are spending to defend themselves against lawsuits brought by consumer lawyers, who contend -- I believe correctly -- that this practice violates several of the supposedly inviolable pillars of the American justice system.

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