Prosecutors team with debt collectors to terrorize consumers in ways both highly profitable and usually illegal.

Hirth wrote another letter to Safeway, begging the grocer to contact the prosecutor's office on her behalf. The letters and phone calls kept coming.

It wasn't until she got in touch with Arons that she discovered she wasn't being threatened by Cook County. It was Corrective Solutions, which has contracts with 21 counties in Illinois.

In 2010, yet another class-action suit was filed against the company, this time on behalf of 600,000 victims in California and Pennsylvania. In November, it agreed to pay a $3 million settlement. But because the class was so big, each victim would receive less than $3 dollars. A federal court refused the settlement, ordering both parties back to negotiations.

Julie Orr bounced a $91 check at a grocery store, but was hounded for more than $300 by a private collections agency.
Rodrigo Pena
Julie Orr bounced a $91 check at a grocery store, but was hounded for more than $300 by a private collections agency.
Adam Levin, former consumer affairs commissioner of New Jersey and owner of
Adam Levin, former consumer affairs commissioner of New Jersey and owner of

"The litigation has been hard," says Bob Hobbs, deputy director of the National Consumer Law Center. "Either these companies declare bankruptcy, or they just drag these things on forever and no one gets paid."

Will the Feds Step Up?

As the case languishes in court, advocates hope Congress will finally close the 2006 loophole.

They received a glimmer of hope in October, when President Obama's new Consumer Financial Protection Bureau announced that it would be overseeing debt collectors starting this year. For the first time in history, the feds will require those making over $10 million a year to supply regular reports to ensure they're not deceiving and threatening consumers.

Still, Moira Vahey, an agency spokeswoman, declined to comment on how it would deal with the bad-check programs.

For now, the only oversight comes from those making money on the deals: the district attorneys themselves. And they show little interest in policing the industry.

Take the Minnesota company once known as Financial Crimes Services. In 2009 it was sued for violating the Fair Debt Collection Practices Act. The company agreed to pay $75,000 in penalties and court costs.

Last year, it changed its name to Check Diversion Program, and it's still operating throughout Minnesota and Wisconsin. "We're not a debt-collection company, but a diversion program," says CEO Scott Adkisson. "We send out approved letters. And it's the DA's decision who gets them, not ours. We just manage the program."

The evidence suggests otherwise. In Minnesota's Goodhue County, the program is run by the Red Wing Police Department, which referred inquiries back to Adkisson. Minnesota Attorney General Lori Swanson would not respond to interview requests, either.

Levin believes this lack of oversight may be the key to dismantling the programs: If prosecutors aren't reviewing the cases, collection agencies aren't legally eligible for immunity.

In the meantime, victims like Orr, Schwarm and Hirth have little recourse but to hire lawyers, paying thousands to defend themselves for bouncing $50 checks at the grocery store.

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scottindallas topcommenter

So, Is Unfair Park dead?  Maybe it's my browser, but this thing seems all screwy.  

Anyway, this goes to my point about utilities, they are distinct markets from free markets, and privateering in them can be quite pernicious.  Gov't need to do what it do, and stay out of truly free markets, and concern itself only with crimes against people. 


If you think this is bad, you should talk to individuals in Texas who've been convicted of a minor drug offense, a DWI, or DUI. Ankle monitor companies, Interlock devices, specialty courts, special counseling groups, none of it optional. Refusal means the offender goes to jail. It is a big money business for both private enterprise and city-county-state government (you KNOW they are making a little money somewhere or they wouldn't hook up with these scheisters). Some offenders are on the hook to the county or the state for thousands of dollars every month--no wonder recidivism is so high. And if you fail to keep up this high debt, probation is revoked and you go to a privatized prison where there is no motivation to get you out and back into society. You're worth more to the state of Texas as a prisoner than a tax-paying citizen! It is a national disgrace! If people only knew the stories of these poor souls who had one lapse in judgement and the consequences and repercussions are enormous.


How insane is it that our so-called representatives allow this to go on? They should burn this whole sham industry to the ground. The companies who push those red-light cameras have the same agenda. They can talk about public safety all they want, but everyone knows it's all about the Benjamins.


It's time to hold our district attorney's responsible for their actions. This type of behavior should be unconscionable but it's not. It's perfectly legal and acceptable. Everyone's on the take here. Let me be more frank - even if they're not taking payoffs from the debt collection industry their election campaigns take contributions - whether straw or direct - and these can then, in some cases, be cash in the pocket of the elected official. Shame on them.


the only two Orr's I care about is Ben Orr, the great, departed bassist of The Cars, and the GREAT Bobby Orr-#4, the man who scored 146 points, AS A DEFENSEMEN. The best two way player ever!

TheCredibleHulk topcommenter

Interesting article.

I think I'll go check my checking acct. balance...