Collection agency posing as prosecuting attorney gets caught and pays $2.55 million

Some states have a bad check diversion program that is designed to facilitate the payment of bad checks to merchant victims. These programs usually involve a district attorney and sometimes even, a private collection agency. The idea behind these programs is to give the bad check writers a chance to make their bounced checks good without further escalation of the issue to the DA’s office. Pennsylvania has one such program and it was abused by a collection agency.
American Corrective Counseling Services is a collection agency based in California. It was involved in helping Pennsylvania merchants recoup funds on bad checks. Unfortunately, it got a little carried away. It, allegedly, sent letters to debtors on letterhead that was purportedly from district attorneys. These letters threatened the debtors with criminal action if they failed to not only pay the bad check, but if they failed to pay a $170 fee for an “accountability class.” Indeed, according to a report by the Associated Press, one elderly woman who wrote a check for $27 to Kmart, which bounced, was told she would have to pay fees of $72 to clear the matter up, “plus another $170 for the accountability class.” The case is entitled Del Campo v American Corrective Counseling, in the 9th Circuit. The violations of the Fair Debt Collection Practices Act, in this case, are enoromous.
A class action lawsuit was filed against American Corrective Counseling Services. It settled the case for $2.55 million.

If you have been harassed or bullied by a debt collector, or if your credit report is inaccurate and the credit reporting agency will not fix it, email Attorney Gary Nitzkin or call toll free (888) 293-2882.  For more information about our firm, visit our website, Michigan Consumer Credit Lawyers.  We have a lot of good information including short “how to” videos that you will find useful.

This entry was posted on Monday, December 14th, 2009 and is filed under Collection Agencies breaking the law . You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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