An American Bar Association ethics committee issued an opinion Wednesday finding that a growing practice of local prosecutors allowing collection agencies to send demand letters - suggesting they came from the prosecutor's office - violates the ABA's professional conduct rules.
The letters sometimes threaten prosecution and steer the consumer to a fee-based personal finance class. The prosecutor's office typically gets a cut of the money generated from the finance class.
"Typically, no lawyer in the prosecutors 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," according to the written opinion from ABA's Standing Committee on Ethics and Professional Responsibility.
The New York Times gave national coverage to the practice in September 2012 in an article on bad check collectors and their relationships with local district attorneys offices. The article notes that prosecutors argue such partnerships help them focus on more serious crimes. Consumer lawyers commonly have challenged the practice, arguing district attorneys are basically renting out their stationery.
The ABA committee's opinion essentially backs that argument:"A prosecutor who provides official letterhead of the prosecutor's office to a debt collection company for use by that company to create a letter purporting to come from the prosecutors office that implicitly or explicitly threatens prosecution - when no lawyer from the prosecutors office reviews the case file to determine whether a crime has been committed [violates two specific rules]."
The committee further states that the practice violates ABA's Model Rule 8.4(c) that deals with "dishonesty, fraud, deceit or misrepresentation" and Model Rule 5.5(a) that addresses unauthorized practice of law.
The ABA Standing Committee on Ethics and Professional Responsibility periodically issues ethics opinions to guide lawyers, courts and the public in interpreting and applying ABA model ethics rules to specific issues of legal practice, client-lawyer relationships and judicial behavior.
According to the ABA, reports indicate that more than 300 local district attorneys' offices have contracted with debt collection companies, often offering their seal and signature with minimal if any oversight and without determining if any crime has been committed.