DAs, Debt Collectors, and the ABA Model Rules

By Bruce Green

A front-page NY Times article described partnerships between district attorneys and debt collection agencies.  Evidently, the agencies use DA letterhead to threaten to prosecute debtors unless they both make good on their bounced checks and pay an additional amount to fund an educational program on financial responsibility that they will then have to attend.  The prosecutors’ offices take a cut.

This scenario provides an opportunity to explore prosecutors’ special role and some of the limitations and obligations that come with it.  In particular, the scenario raises at least five questions relating to prosecutors’ role, responsibilities and exercise of discretion:

1. Evidently, no prosecutor is determining that there is a sound basis for threatening debtors with criminal prosecution.  A bounced check may not be enough in itself to establish a basis for a criminal prosecution if, for example, the checking account was overdrawn unknowingly.  May prosecutors threaten to prosecute individuals for writing bad checks without first determining that there is a basis – e.g., probable cause – to support a prosecution?  ABA Model Rule 3.8(a) requires probable cause before filing a charge.  Should the same be required before threatening to file one?

2. If some review of the evidence and exercise of judgment are necessary before making these threats, must they be made by a disinterested prosecutor, rather than by a collection agency acting with prosecutors’ authority and paying for the use of prosecutors’ letterhead?  Prosecutors have “the responsibility of a minister of justice,” says the Comment to ABA Model Rule 3.8.  Can they delegate that authority to a for-profit company acting on behalf of creditors who may or may not have legitimate civil claims?

3.  Do the prosecutors really intend to prosecute those who receive letters and do not make the demanded payments?  If the threats are empty, are the letters impermissibly misleading under ABA Model Rules 4.1(a) or 8.4(c)?

4. If the prosecutors do plan to carry out the threats, are they doing so for an improper purpose?  Prosecutors have vast discretion to decide whether to prosecute, or threaten to prosecute, bad check cases when there is evidence to support a charge.  But some bases for making this decision may be illegitimate.  One can imagine deciding to bring charges based on the amount of the check or the number of bounced checks.  But is it legitimate to single out debtors for threatened prosecution because a particular collection agency is paying the prosecutor’s office to do so?  Is this an abuse of power that is “prejudicial to the administration of justice” in violation of ABA Model Rule 8.4(d)?

5. Prosecutors may receive allegations of wrongdoing committed by the collection agencies with whom they are partnering – e.g., allegations that they defrauded debtors or committed frauds on the court.  If so, will the prosecutors have a conflict of interest under ABA Model Rule 1.7(a)(2) that interferes with their ability disinterestedly to investigate and address the allegations?  Do prosecutors have a duty to avoid partnering with collection agencies in order to avoid these possible conflicts?

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