ABA to prosecutors: Don’t give official letterhead to debt collection companies

November 12, 2014

The American Bar Association released a formal opinion Wednesday warning prosecutors that providing official letterhead to a debt collection company for its use may violate Rules of Professional Conduct.

Prosecutors’ offices around the country have agreements with debt collection companies that allow the debt collectors to use the prosecutor’s letterhead to create and mail demand letters. The letters typically say the recipient has allegedly violated a criminal law and advise the debtor that he or she could avoid the possibility of further action from the prosecutor’s office by paying the debt, and perhaps even a fee to attend a mandatory debtor education course.

But, according the ABA’s Formal Opinion 469, no lawyer in the prosecutor’s office has reviewed the case file to determine whether a crime has been committed and if prosecution is warranted. The prosecutor’s office also doesn’t review the letter to ensure it complies with the Rules of Professional Conduct prior to mailing.

The ABA believes this practice violates Rules of Professional Conduct 8.4(c) and 5.5(a).

These letters “misuse the criminal justice system by deploying the apparent authority of a prosecutor to intimidate an individual,” the opinion states. “They carry with them the implication that the prosecutor or associates in the prosecutor’s office have reviewed the facts and found that a crime has been committed and criminal prosecution is warranted. To create such a false impression violates Rule 8.4(c).”

The opinion went on to say, “The practice of law is defined by state statute and case law. In the collection area, generally, a nonlawyer may negotiate, adjust, and settle a debt on behalf of a creditor, but a nonlawyer cannot give legal advice, institute litigation, or threaten to sue on behalf of another. The participation by a prosecutor in the conduct described in this opinion, wherein the prosecutor supplies official letterhead to a debt collection company and allows the debt collection company to use it to send threatening letters to alleged debtors without any review by the prosecutor or staff lawyers to determine whether a crime was committed and prosecution is warranted, violates Rule 5.5(a) by aiding and abetting the unauthorized practice of law.”

These debt collection companies have been the target of lawsuits around the country in recent years. In 2005, a proposed class-action lawsuit against American Corrective Counseling Services and its affiliates was brought in federal court in South Bend. Diversion programs in Allen, Marion, Noble, Porter, St. Joseph and Vigo counties were at issue in that case. The judge ruled in favor of the defendants in that suit based in part on ACCS’ bankruptcy proceedings.



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