As Paul Arons, a consumer attorney in Washington state, told the Times, "This is guilty until proven innocent."
As we all know, that is the very opposite of the way it's supposed to go. Before a prosecutor uses the power of his or her office to help a private company collect money from an individual accused of bouncing a check, that office should first investigate the allegation, then make a probable cause determination that the check was bounced on purpose. Unless a prosecutor has the staff available to ride shotgun on these cases, making sure that each consumer who receives a collections notice actually owes that debt, the letters should not bear that prosecutor's name and seal. To do otherwise undermines the integrity of his or her office.
[Article: True Confessions of Debt Collectors]
Furthermore, do prosecutors really want to entrust their good names to the scandal-plagued debt collection industry -- potentially putting both their office and their future political careers on the line -- over bounced checks and a paltry payback? That's not just bad justice, it's also bad strategy. Here's a political prediction: The first family wrongfully pushed into bankruptcy or foreclosure by one of these collection letters will be the last court case that prosecutor tries.
Finally, let's take a harder look at these "financial responsibility" classes. What legal or judicial purpose could they possibly serve? If a person defrauds a retailer by deliberately kiting a check, the issue isn't financial responsibility -- it's criminal intent. The proper response isn't a menacing letter -- it's jail time.
But the vast majority of people who receive these letters are not criminals -- they're ordinary Americans who honestly believed they had the money to cover a purchase. Besides, it's not as though they won't suffer for their mistake: the fees imposed by banks and retailers in such cases inflict significant pain, especially for people of limited means. They know they goofed, and rattling legal sabers or coercing them into spending $170 on a bogus class won't change that. What's more, while it might be financially expedient for prosecutors and debt collectors, using the power of law enforcement to coerce consumers into spending money they don't have is no way to teach financial responsibility. Frankly, it denigrates the concept of financial literacy.
Both in 2010 and the current election cycle, we are witnessing the harsh reality of a political system that is up for sale. American justice has always been special and the system must not be sold to the highest bidder -- not to lobbyists, not to politicians, and certainly not to debt collectors. District attorneys cannot continue to sully their reputations and demean our institutions by renting out their letterhead to the lowest life form that bids. As citizens and as consumers, we deserve better.
Adam Levin is chairman and cofounder of Credit.com and Identity Theft 911. His experience as former director of the New Jersey Division of Consumer Affairs gives him unique insight into consumer privacy, legislation and financial advocacy. He is a nationally recognized expert on identity theft and credit.