"Seriously, Is The Attorney General of Florida After Me For A $14 Bounced Check?"
Apparently the answer to that question is "yes." CNN is reporting that several states have outsourced bounced check collections to a company that will track you down — even for minor accidental bounced checks — and make you take their personal finance class. By the way, the class costs $160.
CNN says:
The firm — American Corrective Counseling Services, or ACCS — splits the money it collects with the prosecutor's office. But it also makes money from financial management courses that people who wrote the checks are required by law to attend at their own expense. And the company's contract with the prosecutor's office states those classes are its "principal business activity."
The $14 check Michael O'Neil wrote to a Florida drugstore ended up costing him $285, including the $160 class fee.
O'Neil said he and his wife tried to make good on the checks with the merchants involved and pay any fees required. But he said the companies told him it was too late — they had turned the matter over to ACCS.
The couple had been in Michigan for 10 months before they got their first notice from the company, which warned that "the State Attorney will not discharge the report(s) of criminal activity against you until all program requirements, including attending class, have been met."
Public Citizen has filed lawsuits in California, Indiana and Florida, accusing ACCS of violating the Fair Debt Collection Practices Act by "moving against people without establishing probable cause, as prosecutors would be required to do."
CNN interviewed Barney Frank, head of the House Financial Services Committee, who was unaware that small checks were being prosecuted under the law that allows outsourcing.
"The way it had been represented to us is that it was a way to avoid criminal prosecution," Rep. Barney Frank, now chairman of the powerful House Financial Services Committee, told CNN. "So I would be surprised if someone were to be prosecuted for one check for a few dollars."
Frank, D-Massachusetts, said the complaints raised by people with the collection process were "the first time this has been brought to my attention," and he told CNN that perhaps the law needs "some looking into."
A trip to ACCS' website uncovered this description of the services they provide:
"ACCS is the leader in developing customized solutions for America's Prosecutors with the management of high volume misdemeanor cases." All the people interviewed by CNN said they'd accidentally bounced a check and hadn't intended to do anything criminal.
Bounced-check collection deals draw fire [CNN via CL&P Blog]
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Comments:
I get that boucing a check is technically fraud, but with banks restructuring how they do credits and debits, its easier than you think to "accidently" bounce a check. So all this prosecution talk feels like overkill.
Also, save the "just have enough money in your account" comments. We get that. Since you're perfect and never make a mistake, you really don't need to be on this site, do you? The issue is does the punishment match the crime and what SHOULD the law be.
This also feels conflict of interest-y to me, even though I can't pinpoint it (just because they do collections and classes doesn't seem to be enough).
Sounds like states trying to get into rackets with big business to make profit off of people...reminds me of the case where the judges were sentencing teens to time in detention centers in exchange for kickbacks. In this instance, it is the state getting the kickback instead of the judge, personally. I mean...$300 for a $14 check? Who in their right mind would think this is fair "punishment"?
Kick em while they're down :(
California is one but I think they run their own program not outsourced it to a collection agency. They have personal finance classes for free and you have to pay off what you own.
@ARP:
"even though I can't pinpoint it"
I pin it squarely on the fact that ACCS makes $160 for each pair of balls they bust, whereas a prosecutor in a court of law would make nothing more than their regular salary.
Accidental
Error
Wife/Spouse/Husband/Significant-Other etc involvement
There are differences between each type of "bounced" check.
Way back when, my Mom wrote a check for the mortgage payment. Dad was away on a business trip and suddenly remembered the mortgage payment was due. He mailed off a check as well and forgot to tell Mom. Of course the car needed two tires was Dad was away and Mother wrote a check for them as well.
Two hands in the check book, no communication between the parties, sooner or later a bounced check is going to happen.
@ARP: I can think of plenty of times when I'm switching accounts or making transfers for large purchases. Also, it seems like the way my account posts credits and debits is much more irregular and a few years ago. So, yeah, lets nip the "but they're deadbeats!!!!!11!!" comments in the bud.
At first I thought "no one would stand for this!"
But then I realized it's exactly what we've been putting up with just about all of our lives with parking tickets.
You make a mistake (or the traffic cop does) and get an instant penalty without trial, appeal, or any sort of justice at all.
(Yes, I know there is a process of justice in the case of most parking tickets, but the choice is ridiculous. Fight the $25 (or $165 if you're in NYC) and lose half a day's wage waiting for your turn, or just pay it and hope it was for the greater good).
I don't get it, why don't they just not pay? I've run into problems like this before where it seems like I am begging companies to take my money. Why should I waste my time on it?
I wonder if paying with a debit card would have avoided all this needless horseshit? It's time to retire the checks folks. I don't buy anything I can't pay for with my debit card.
Keep deadbeat comments to a minimum? Here, let me be the first! Don't bounce a check, you'll have no problem!
I do admit that the whole thing seems a bit shady to me though...
Ech. That's a good example, and one of the reasons I don't have a joint checking account w/my wife.
It's not that I don't trust her with money; we have a joint savings. I just have no desire to call my wife to clear a purchase every time I use my debit card. And nor does she.
Also, checks in general are so 1945.
@ScottRose: Checks are so 1945 until you have to pay rent with them. I still have to pay rent with a check. It's the only reason I use checks any more. Well, and when I let the ATM machine eat my card, which happens more often than I'd like to admit...
(Woman screaming in the background)
"GET YER DIRTY HANDS OFF OF ME! Mother (expletive) it's only a (expletive, expletive) check, don't you (expletive) suckers got better things to do??"
On the next special episode of COPS! Florida AG edition.
Yeah i like this. If you're bouncing checks you're living paycheck to paycheck saving NOTHING. So basically you're broke. The fact that this was a $14 check and he didnt pay it off EARLIER. He had plenty of time to pay it off but didn't. So i think he should have to goto some class or something. He's a deadbeat wanting sympathy because he thought he could ignore pay a debt. I hate this, absolutely hate this.
We have a culture where a guy borrows $5, $20 or even $500 and doesnt even say a word to you about it the next time he sees you. They pretend as if the debt doesn't exist. I pay my debts immediately no matter how small to people because i want to be known as someone that can be relied on to pay their debts.
@Randy Treibel: He's a deadbeat for FOURTEEN DOLLARS? You have to be kidding me.
You seem to be projecting a bit, here.
@Randy Treibel: Way to blame the victim. Did you even read the article? A check for $14 was accidentally bounced. When they found out, they went to the merchant to pay the $14 plus any fees for bouncing a check (in my area I usually see it for $25). Instead the merchant filed a claim with the State Attorney General. Now, because of a $14 dollar bounced check, they ended up paying $285 dollars. Sure, they could have managed their money better, but does that kind of punishment fit the crime?
"By the way, the class costs $160.
Wonder if they'll take a check?
This is ridiculous! Usually, most people did not mean to bounce a check. If they do they usually say oops and apologize and then make it good.
In today's society prosecutors in many states I have lived in want to charge you a huge fee, like the $160, even if it only took one day to rectify the bad check.
Sean
www.seanscarpetcare.com
@Randy Treibel: "Yeah i like this. If you're bouncing checks you're living paycheck to paycheck saving NOTHING. So basically you're broke"
And you are implying that this somehow makes them bad people. Living paycheck to paycheck does not mean you are a bad person. And as wastedlife said, it's obvious you haven't read the article.
@nakedscience: I would add that crazy as it sounds, for some people its not easy getting out of the rut of living paycheck to paycheck. Let alone maintaining any sort of permanent emergency fund let alone a retirement fund, college fund, etc.
All the people interviewed by CNN said they'd accidentally bounced a check and hadn't intended to do anything criminal.
Call me cynical, but I can't imagine anyone being interviewed for a TV program going "yup, I was trying to commit check fraud!"
Checks are so 1945 until you have to pay rent with them.
@nakedscience: Or until you lose your wallet.
I hate the way everyone treats you like a crook if you have to write a check. Lordy, I would use a debit card if I had one!
@nakedscience: you can pay your rent without checks. I pay mine through bill pay...I never write checks anymore.
@I_have_something_to_say: They won't get rid of checks until 1) everyone, including apartment complexes, takes cards and without an excessive fee attached and 2) they give debit cards to everyone, even people with bad credit.
Even if the former happens, I'm not holding my breath on the latter.
I have major problems with the way ACCS is conducting its business, with a vested interest making as many people as possible pay for the class. The law should probably be changed to establish a single-check dollar limit for triggering the necessity to attend a class (open for debate).
Nevertheless, as scummy as the practices of ACCS might be, is this case really the most sympathetic one they had for the story? Let's review the original article:
1) Two bad checks were written totaling $200. So no, Florida was not coming after them for a single $14 check - Florida was coming after them for a bad $14 check and a worse $186 check.
2) The timing of the check-writing immediately prior to the move makes me wonder whether there wasn't, in fact, some actual intent to defraud happening with Mr. and Mrs. O'Neil. Possibility: before leaving town, they write a few checks on an account they just closed, knowing that those checks would end up bouncing and thinking, "They'll never find us - we're moving!"
3) They admit that they are in hot water financially and that they are not good money managers. This isn't just an "oops", this is habitual for them. I'd say by their admission alone, they are in dire need of a comprehensive money management class (just not one run by ACCS).
4) The length of time between the writing of the checks and their attempt to make restitution makes that restitution attempt pretty lame. We're not talking about finding out you made an "oops" 30 days after you write a check, when you look at your next bank statement and realize you made an error. We're talking about 10 months - the original creditor has already assigned the claim to a collection agency, and the collection agency has had to hunt you down in another state for payment.
I have had my time of being young and near-flat broke. There's nothing worse that forgetting to record a single purchase, that then snowballs into turning checks into rubber right and left. Been there, done that, paid what I owed and the NSF fees loooong before those checks went to a collection agency. This story just doesn't pass my smell test.
@madanthony: But... if the checks had posted in the order I wanted them to, I would only committed a little check fraud.
@ARP: Bouncing a check accidentally is not fraud, even "technically." Fraud requires intent to deceive. So the people featured in the article owe absolutely nothing to ACCS.
There are plenty of people who have multiple bank accounts and transfer funds between them. This is especially true of people who have businesses or are divorced. It's not the case with these people, but making the blanket assumption that anyone bounces a check is living paycheck to paycheck. Some people just forget to make a transfer or funds are placed on hold for longer than expected (which does happen quite often).
According to the report, it's pretty likely simple mistakes are getting swept in, as the process is initiated based only on an affidavit from the business "stating that the check bounced, and efforts to obtain its money from either the purchaser or the bank had failed." There's nothing in there about intent. This is just an attempt to use the criminal process to collect on ordinary debts.
@Randy Treibel: Florida is such a crime-free place that they can afford to prosecute people for a $14 bad check?
@Shrew2u:
1) IIRC, the original article on CNN also had the $14 check in the headline before they changed it. Not saying that's OK, just throwing it out there.
2) They probably always write checks because...
3) If they're in trouble financially they probably have a low credit score and can't get a debit card.
@emilymarion333: Uh, no I can't. My apartment complex does not expect anything except checks or money orders/cashiers checks.
@Rectilinear Propagation: And not everyone WANTS a debit card. And until I can roll up to Del Taco and not get charged 85 cents to pay by credit or debit card, then checks are NOT OBSOLETE.
Bounced checks are fraud. No excuses. You need to pay a price for criminal activity.
@Applekid:
Sounds to me like he got off easy. Less than $300 for writing a bad check? How much do you figure the fine would be for that? How much do you figure it's worth to not have a criminal record?
People who write bad checks need to be prosecuted, but it's expensive to do so. This method of handling it sounds like a solution that works in the favor of all parties involved.
@varro: You're missing the point, I think. FL is outsourcing to a third party so they aren't necessarily prosecuting it.
@Rectilinear Propagation: A credit score rarely determines your ability to get a debit card. Your chexsystems report, that would.
@I_am_Awesome: Yes, because no one ever makes a mistake and accidently bounces a check, and those people are totally criminals. Please.
@nakedscience: Charging a consumer 85 cents is against the Visa/Merchant agreement. They should not be doing that.
If I'm a business owner, I'd never take a check.
I only write checks when I need to float it for a couple days...
@kwsventures: So $300 for a $14 matches up with the crime, eh? And no, it's not fraud if there was not an intent to do fraud, sorry to say. Accidents happen. I take it you've never, ever made a simple mistake before, right? Because if you have....
Agreed these people probably need some help with money management. But $160 for such a class when the people are obviously having trouble financially? Sounds like punishing the poor to me. These classes might be a great use to people - IF they were provided for free.
And I have to say I do find it galling that the masters of the financial universe are getting billions of dollars for f***ing up royally, while these people are hunted down for their bounced $200 check.
Sounds to me like the wonderful world of arbitration has made it's way to goverment.
ACCS: Dishing out justice on the cheap so your government doesn't have to.