Sunday, September 16, 2012

In Prosecutors, Debt Collectors Find a Partner -

In Prosecutors, Debt Collectors Find a Partner -
So you get a "Pay up or go to jail letter,"and...
"They bear the seal and signature of the local district attorney’s office. But there is a catch: the letters are from debt-collection companies, which the prosecutors allow to use their letterhead. In return, the companies try to collect not only the unpaid check, but also high fees from debtors for a class on budgeting and financial responsibility, some of which goes back to the district attorneys’ offices."


An Individual American said...

from the story:

Debt collectors have come under fire for illegally menacing
people behind on their bills with threats of jail. What makes
this approach unusual is that the ultimatum comes with the
imprimatur of law enforcement itself — though it is made before
any prosecutor has determined a crime has been committed

Prosecutors say that the partnerships allow them to focus on more
serious crimes, and that the letters are sent only to check writers
who ignore merchants’ demands for payment. The district attorneys
receive a payment from the firms or a small part of the fees collected.
. . .
No one at the district attorney’s office reviews the cases” before
the collection company sends out letters, said Priscilla Cruz, an
assistant director in the Los Angeles district attorney’s office.

The D.A.s involved justify this practice by saying that

The influx of bad-check reports overwhelmed district attorneys’ offices,
according to Grover C. Trask, a former district attorney in Riverside, Calif.,
considered the father of such programs. “It was a way to deal with a fairly
serious nonviolent crime going on in the business community
, but not
overburden the court system or the resources of the district attorneys,”
Mr. Trask said.

Of course, D.A.s won't do anything about the "fairly serious nonviolent crime going on in the business community" perpetrated by corporations and their debt collectors -- such as HOAs and their collections attorneys -- against individual American consumers. Because, hey, that's just a civil matter. In those cases, the emotional and financial burden is upon the individual American consumer to take the corporation and their debt collectors to court. Anything else would be government interference in the free market.

This may explain why Republicans and libertarians want to make it harder for individual American consumers to sue corporations, but not the other way around, via "tort reform" and elimination of our 7th Amendment rights via mandatory arbitration.

Ayn Rand expended a lot of ink pontificating on the hatred of the Individual by the Collectivists. It is ironic that her followers have revealed an utter contempt for the individual American in favor of the Collectivist entities known as corporations.

As Mike Knoczal sarcastically observed,

"I like this form of libertarianism, where policy is simply the things that defend the power and hierarchy of creditors, the rich and the elite, much better than the normal 'gee whiz markets are cool' kind. There’s almost a Nietzschean zeal for the wonk world to first and foremost accept creditors as a master class to whom all policy bends." November 05, 2011

or in more plain language

"A libertarian vision of defending power where 'benefiting creditors is the only thing that the rules of debt should consider.'"

related posts on this blog:

- "Supreme Court Arbitration Ruling: Courts for the Wealthy and Wall Street" April 27, 2011

- "Credit Card Arbitration Trumps Lawsuits, Court Says" January 20, 2012

- "Gov. Jan Brewer Signs New Law That Takes Debt Collectors' Word For How Much You Owe" May 16, 2012

- "The Fine Print Society" December 22, 2011

An Individual American said...

Perhaps a Romney administration will sell the rights to weaponized drones to private entities, now that 0bama has set the precedent that Americans can be assassinated in drone strikes without due process. As Republicans constantly remind us, trials take time and cost money, and are an inconvenience to businesses. And the lawyers who represent individuals against corporations are parasites.

Here are some other stories about the libertarian ideal of privatized justice :

- "Big Content's Latest Antipiracy Weapon: Extradition" Ars Technica. July 21, 2011

"The extradition request is remarkable; O'Dwyer has no obvious connection
to the United States. He hasn't set foot there since he was a small child, his
servers were not located there, and it's not clear he has broken UK law."

- "Copyright Wars Heat Up: US Wins Extradition Of College Kid From England" Ars Technica. March 13, 2012

"He was asked to report to his local police station on May 23, 2011, where
he found out what had happened: UK police had dropped their own investigation,
but the US had requested O'Dwyer's extradition."

- "Private Justice: How Hollywood Money Put A Brit Behind Bars" Ars Technica. August 16, 2012

Anton Vickerman, 38-year old owner of the once popular link site (STC),
was sentenced to four years in prison on Tuesday by a British judge. But the prosecutors
sitting across the courtroom from him didn't work for the Crown — they were lawyers for the
movie studio trade group
Federation Against Copyright Theft (FACT).

FACT, not public officials in the UK, was the driving force behind Vickerman's prosecution.
Indeed, FACT effectively took on the role of a private law enforcement agency. Private
investigators hired by FACT first identified Vickerman as the administrator of STC and
built the case against him. His assets were frozen at FACT's request by a government
agency — which was itself funded by FACT. And when the UK's public prosecutors decided
not to press charges against Vickerman at all, FACT initiated a criminal prosecution
on its own dime

This is a new development for anti-piracy efforts. Organizations like the MPAA, RIAA,
IFPA, and FACT have long lobbied law enforcement officials to prosecute "rogue sites"
and have provided them with information and logistical support to do so. But public
prosecutors generally have the final say on who will be indicted. In the Vickerman
case, the public prosecutors concluded that there wasn't enough evidence to merit
. FACT disagreed and invoked what one lawyer told us is an "archaic right"
for a private organization to bring criminal prosecutions against other private parties

An Individual American said...

Another tale, from The Boulder Weekly at ("Three-Dollar Shakedown" by Wayne Laugesen. February 01, 2007):

Mid-2006: Amanda Eckhoff writes a $3 check to Boulder Valley District School

November 2006: Amanda deposits here husband's $1,600 paycheck from Tech Dwellings

The Eckhoff's continue writing other checks (rent, food, etc.) for about a week before discovering that the paycheck from Tech Dwellings bounced. As a result, checks written by the Eckhoffs also bounce.

"Tech Dwellings made good on the paycheck, paying us
with cash," Amanda said. "Our bank was great. I explained
it, and they removed all overdraft fees. The landlord was
great. She asked her bank not to send our original check
back through, because I needed to rectify the account and
promised to pay her with a money order."

Sometime during all of this, the Boulder school district deposited the $3 check written months earlier. Like the other checks, it bounced through no fault of Amanda's.

Amanda was alerted to the returned check by a letter that
screamed "OFFICIAL NOTICE." At the top it said "Authorized
by: Mary Lacy, District Attorney."

A letter from the District Attorney's Bad Check Restitution
Program threatened Amanda with jail and told her that to
avoid prosecution she had to pay $188 to enroll in a class.
The class would teach her not to write hot checks (which
she never did), and would degrade her with lessons about
balancing a checkbook — even though she's a professional
loan processor!

Threatened with this pay-the-fee-or-go-to-jail demand,
Amanda sent in $94—half the extortion fee and all the
money she had.

. . .
Phyllis, an employee in Mary Lacey's office, told me
the Bad Check Restitution Program is a nationwide private
company that contracts with the D.A.'s office.

"We don't babysit them," Phyllis said. "Her issue isn't
with us, it's with them."

"But it says 'Authorized By: Mary Lacy, District Attorney.'
And it's called 'Boulder County District Attorney Bad
Check Restitution Program.' It's presented as part of
your office," I said.

"But it's not us," Phyllis said.

Since the Eckhoff's could not afford an attorney, they were fair game for the private bill collection agency, which is the libertarian ideal of how capitalism works. i.e., if you have a problem, hire a lawyer instead of asking the government to intervene. Zero tolerance and lack-of-common-sense is only bad when the government does it.

While every other entity involved -- their landlord, their bank, their employer, etc. -- made things right, the District Attorney's office initially denied any responsibility, and the private collections contractor -- who got "$188 for a $3 check that was intended to help a child" -- continued to insist that people like Amanda Eckhoff are criminals who should go to jail.

When the press finally contacted the District Attorney herself and sort of fixed things. It is unknown whether "hired thugs who masquerade themselves as prosecutors" are still working for the D.A.'s office.