DA’s letters to debt
collectors raise ethical questions
By Diane Karpman
The New York Times, "In Prosecutors, Debt Collectors Find a Partner," recently reported on a reprehensible practice. In essence, the District Attorney’s office literally sells their letterhead
to debt collectors. Everyone knows that debt collection (which has resulted in
numerous federal and state regulations) is highly regulated because of past
abuses and outrageous conduct, such as threats of jail.
Shockingly, more than 300
district attorneys’ offices (including some in California) are involved in this
practice. Letters with the seal and signature of a local district attorney’s
office are being sent to thousands of people who wrote bad checks. This column does
not consider the morality of bad checks, or whether they are intentionally or
inadvertently executed. It concerns only the ethics of using a public law office
to address the issue. We don’t have a debtors’ prison any longer.
The Times article considered
a single mother, who was threatened with conviction over a $47.95 check to Wal-Mart.
She received an official letter, signed by a district attorney, informing her
that unless she paid $280.05, including $180 for a "financial
accountability" class, she could be jailed for one year. This official
letter appeared (and was intended to appear) to come from the authorities and
was sent before she was convicted of any crime and before a prosecutor evaluated
whether a crime had, in fact, been committed. In many of these programs, additional
classes are sold, and the consumer is again misled into believing that failure
to participate could result in jail. Maybe the single mom didn’t have an
This unholy and unsupervised
partnership between the DAs and collection agencies is profoundly unethical, as is
explained by professor Bruce A. Green in his article, "Prosecutor For Sale." Remember, prosecutors have higher ethical duties
because they are "ministers of justice." Obviously, their neutrality
and impartiality can be questioned when they are financially aligned with debt
The process lacks
supervision, established guidelines mandating documentation, and notice to the
author of the check. Prosecutors maintain that by outsourcing these
"minor" events, they are free to focus on serious crimes. The problem
is that the recipients of the letters alleging criminal conduct don’t realize
that it’s highly unlikely that they will be prosecuted.
All lawyers are obligated to
exercise the fiduciary duty of independent judgment. Prosecutors are required
to independently evaluate facts to determine if cause for prosecution exists.
They cannot just outsource this fundamental obligation to the buyer who offers
the greatest remuneration.
an attorney to lend his name to a collection agency, without personally
authorizing or supervising the procedures and processes which are pursued in
his name, is a wilful misrepresentation of his professional status and a
grossly improper participation in the unauthorized practice of law for which he
is subjected to severe public censure by this Court." (In Re DeVinny (1977)
255 NW 2d 832.)
Recently, 24 stipulated
dispositions from the State Bar Court were returned for further consideration by the California
Supreme Court. About half involved
some type of loan modification. Many of those cases involved allegations of
aiding and abetting in the unauthorized practice of law, including sharing fees
When a lawyer allows a
paralegal, staff person, or debt collector to "hold himself out" as a
lawyer by using a lawyer's stationary, that is the unauthorized practice of law
(Rule 1‑300). As we all know, lawyers are prohibited from sharing fees
with non‑lawyers (Rule 1‑320), because it could impair the lawyer’s
exercise of independent judgment.
Finally, Rule 5‑100 prohibits lawyers from threatening criminal, administrative or
disciplinary charges. The justification for that rule is that a letter from a
lawyer is a big deal, and has implications that are absent in
normal letters. This is a well‑established concept. Many ethicists have
characterized this process as flat-out abuse of power. As lawyers, we are all
prohibited from threatening criminal action, so why are DA’s being compensated
Diane Karpman can be
contacted at 310 887-3900 or email@example.com.