126.96.36.199.5 Check diversion programs
“Check diversion” programs consist of a partnership between a collection agency and a district attorney. Typically, the collection agency threaten consumers who have written a check that was dishonored by their bank on the district attorney’s letterhead with criminal prosecution and jail time if the consumer does not pay the check plus high fees and tuition for enrolling in “financial responsibility” classes they may conduct. The fees they demand may exceed a small check by more than $150. The fee collected is typically split with the district attorney’s office providing that office much needed revenue but often at the expense of the poorest and least sophisticated consumers.
The FDCPA requirements for these companies are discussed at § 4.3.12, infra. In addition, at least one state prohibits debt collectors from using a district attorney’s letterhead or seal,218 and the American Bar Association has issued a formal ethics opinion about the practice.219
218 See Or. Rev. Stat. §§ 135.925(9), 646.639(2)(p).
219 ABA Standing Committee on Ethics and Professional Responsibility. Formal Opinion No. 469 (Nov. 12, 2014) (unethical for prosecutor to lend its letterhead to collection agency that even implicitly threatens prosecution, unless lawyer in prosecutor’s office determines prosecution is warranted or determines that letter complies with Model Rules 8.4(c) and 5.5(a) of Rules of Professional Conduct).