As if there was not enough stress associated with receiving debt collection notices in the mail, this weekend's New York Times included an article detailing that debt collection agencies are now partnering with local district attorney's offices around the country to assist with their efforts (NYTimes article here).
According to the article, the debt collection letters appear to have the seal (and signature) of the local prosecutor's office, but are really sent to individuals by private debt collection companies that are essentially "renting" the letterhead to intimidate people who have written bad checks. By using the local prosecutor's office, the demands also include additional fees for financial responsibility programs or other additional costs that are recoverable by the state. It appears that the extra revenue is the "rent" for the use of the letterhead.
The initial problem with all of this is that these letters are often sent without any district attorney reviewing the case or a determination that the individual receiving the letter is subject to criminal charges. Although it is claimed that the merchant has made demands for the repayment of the fees, with the major debt-collection clients being listed as Safeway, Target and Walmart, it is likely that the letters are sent as a matter of course, as happened in the case of Ms Kathy Pepper who bounced a check for $68 while in the middle of a divorce action.
This practice has been challenged by consumer lawyers across the country, including a pending class action in federal court in San Francisco. Indeed, some individuals are even testing their luck and refusing to pay the additional fees demanded by the prosecutor's office.
The bottom line is that debt collectors are trying to be as creative as possible to collect on debts these days and when in doubt, it's worth it to at least speak to a professional before your credit is ruined - or you are forced to attend a financial responsibility class. Even if it's only for peace of mind, it will help you sleep at night knowing what the debt collectors can and can't do to you.