In every jurisdiction it is a crime to write a bad check with knowledge of insufficient funds. In other words, if you write a check at Wal-Mart, knowing that there is not enough money in your bank account to cover the check, and Wal-Mart believes that your check is a present payment, then you may have committed a crime. Some prosecutors will give individuals the chance to pay these check, plus fees, and no criminal charges will be filed. After all, most merchants don’t want their customers thrown in jail – they just want the money.
Commonly known as a check diversion program, a letter threatening criminal prosecution is a powerful collection tool. However, this practice is routinely abused. Now, the American Bar Association’s Standing Committee on Ethics and Professional Responsibility has issued an opinion on the matter. ABA Formal Ethics Opinion 469 advises criminal prosecutors that it may be unethical to use the prosecutor’s office to scare consumers into paying bounced checks.
The ABA opinion states, “Typically, no lawyer in the prosecutor’s office reviews the case file to determine whether a crime has been committed and prosecution is warranted or reviews the letter to ensure it complies with the Rules of Professional Conduct prior to the mailing.” The prosecutor-debt collector arrangements is also “abusive” because it conveys “the impression that the machinery of the criminal justice system has been mobilized” against the consumer, who is led to believe that he or she may face jail time unless the collector gets paid.
In many jurisdictions check diversion letters are routinely sent out by prosecutors without review and, in some cases, without even a reasonable basis that a crime was committed. Hopefully, this ABA opinion will deter this practice and limit the number of these improper and unethical letters.