by Deepak Gupta
When Roz Terrill wrote a $41 check at the local Goodwill store to buy clothes for her two special-needs children, she had no idea it would lead to threats of criminal prosecution against her. Because of a banking mix-up, Roz’s check did not clear. Months later, she received a letter that looked like it had been sent by the Kitsap County Prosecuting Attorney. Bearing a prosecutor’s seal at the top, it said that Roz had been accused of a crime and, in large type, that, “to avoid the possibility of criminal charges being filed,” she had to pay the amount of the check plus $185 in fees.
What Roz didn’t realize was that the letter was really sent by Bounceback, Inc., a for-profit Missouri-based debt collection company that had paid the real prosecutor’s office for permission to threaten consumers. The real prosecutor had never reviewed any evidence about Roz’s check and was never going to prosecute her. Nor was there any legal basis for the fees. But Roz ultimately ended up paying the check plus $220 in fees because that was the only way that she could stop the threats and gain peace of mind. Wodena Cavner and Linda Parks, a wheelchair-bound retiree, went through similar experiences.
The three consumers have filed a class action lawsuit against Bounceback, Inc. in federal court in Spokane, Washington. My law firm, Gupta Beck PLLC, along with the Seattle firm of Terrell Marshall Daudt & Willie, represents the plaintiffs. You can read reports about the suit at Courthouse News and InsideARM. For an in-depth look at this practice, read Jessica Silver-Greenberg's article from a couple years back in the New York Times. Here's a clip from a local TV news story on our case:
Bounceback’s operations are much like those of any other high-volume debt collector: It solicits its business from large national retailers and other merchants, receives electronic information about unpaid checks directly from those merchants, and sends out standardized collection notices to consumers.
But there is one crucial difference: Under Bounceback’s so-called “Check Enforcement Program,” county prosecutors rent out the prosecutor’s seal and letterhead to Bounceback in exchange for a cut of the collection fees, thereby cloaking ordinary civil debt collection under a sham “criminal diversion” program.
Despite Bounceback’s use of the county prosecutor’s name and authority to coerce payments, the prosecutors exercise no meaningful control over Bounceback’s day-to-day collection activities. Bounceback’s threats of criminal prosecution are made without any prosecutor having actually investigated the circumstances to determine whether an unpaid check was written with criminal intent or was simply an innocent mistake. Moreover, when Bounceback sends its collection letters, it cannot know whether a consumer will be prosecuted for failing to pay its steep collection fees, as the letters represent.
The plaintiffs allege that Bounceback’s collection practices violate both state and federal law. They seek to represent a class of consumers who have received collection letters from Bounceback, to stop Bounceback’s deceptive debt-collection practices, and to recover the exorbitant fees consumers have paid to Bounceback.