District Attorneys' are making a profit by allowing collection agencies to use their seal & signatures.
The letters are sent by the thousands to people across the country who have written bad checks, threatening them with jail if they do not pay up.
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. The practice, which has spread to more than 300 district attorneys’ offices in recent years, shocked Angela Yartz when she was threatened with conviction over a $47.95 check to Walmart. A single mother in San Mateo, Calif., Ms. Yartz said she learned the check had bounced only when she opened a letter in February, signed by the Alameda County district attorney, informing her that unless she paid $280.05 — including $180 for a “financial accountability” class — she could be jailed for up to one year. “I was so worried driving my kid to and from school that if I failed to signal, they would cart me off to jail,” Ms. Yartz said. 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. “The companies are returning thousands of dollars to merchants that is not coming at taxpayer expense,” said Ken Ryken, deputy district attorney with Alameda County. Consumer lawyers have challenged the debt collectors in courts across the United States, claiming that they lack the authority to threaten prosecution or to ask for fees for classes when no district attorney has reviewed the facts of the cases. The district attorneys are essentially renting out their stationery, the lawyers say, allowing the companies to give the impression that failure to respond could lead to charges, when it rarely does. “This is guilty until proven innocent,” said Paul Arons, a consumer lawyer in Friday Harbor, Wash., about two hours north of Seattle. The partnerships have proliferated from Los Angeles to Baltimore to Detroit, according to the National District Attorneys Association, as the stagnant economy leaves city and state officials grappling with budget shortfalls. Lawyers for the check writers estimate that more than 1 million of them are targeted a year. The two main debt collectors — California-based CorrectiveSolutions and BounceBack of Missouri — return millions of dollars each year to retailers including Safeway, Target and Walmart.
http://correctivesolutions.org/ http://www.bouncebk.com/ CorrectiveSolutions, which says it has contracts with more than 140 prosecutors, has been dogged by similar legal challenges, including a class-action lawsuit pending in federal court in San Francisco that claims the company “has constructed an elaborate artifice” to terrify borrowers into paying. CorrectiveSolutions, which did not respond to requests for comment, has contested the claims, court filings show.
For the collection companies, the partnerships offer a distinct financial benefit: the “financial accountability” classes. Typically, a small portion of the class fees, which can exceed $150, are passed on to the district attorneys’ offices. Check writers are led to believe that unless they take the courses, they could end up in jail. http://www.nytimes.com/2012/09/16/business/in-prosecutors-debt-collectors-find-a-partner.html?_r=3&partner=rss&emc=rss
Hospital debt collection harsh tactics broke laws, report says.
A Minnesota hospital company that worked with debt-collection firm Accretive Health is in hot water with the federal government over allegedly harassing sick patients for money in the emergency department and at their bedsides.
The University of Minnesota Medical Center in Minneapolis, a Fairview Health Services hospital, could get booted from Medicare and Medicaid as a consequence of these alleged activities, according to the Star Tribune. Lesser sanctions are more likely, however, the newspaper reports.
Fairview Health Services, a nonprofit hospital chain, and Accretive Health have been under intense scrutiny since April, when Minnesota Attorney General Lori Swanson issued a six-volume report accusing the companies' employees of harsh tactics including demanding payments upfront from emergency room patients and pressing bedridden patients for money.
Patients were led to believe they would be denied medical care if they didn't pay in advance or settle previous debts, Swanson's reports says. A probe by the federal Centers for Medicare and Medicaid Services uncovered similar incidents, including a woman seeking treatment for a possible heart attack who was asked for $672, according to the Star Tribune.
Federal inspection documents obtained by the Star Tribune show that the hospital repeatedly violated government rules by subjecting patients and their relatives to "abuse and harassment" during bill-collection attempts in the emergency room, labor and delivery area and other wards.
Documents obtained by the Star Tribune show patients' rights against harassment were violated and that the hospital broke a federal law forbidding poor patients from being refused treatment if they can't pay, the newspaper reported. "We are very concerned about the issues that came up and are working collaboratively with CMS to get them resolved," University of Minnesota Medical Center President Carolyn Wilson said in a written statement to the Star Tribune.
Accretive Health agreed to leave Minnesota for as long as six years and up $2.5 million in order to settle a lawsuit Swanson filed. The company continues to deny Swanson's charges that patients were strong-armed by Accretive Health employees or hospital workers operating under Accretive Health's policies.
http://www.huffingtonpost.com/2012/09/14/hospital-debt-collection_n_1885492.html