Counties Sending Check Bouncers to School

But Practice Has Drawn Critics, Who Say Classes May Violate Law

Prosecutors in some Maryland and Virginia counties have adopted a potent tactic to discourage check-bouncing: threatening writers with prosecution if they don't attend "bad check school" run by private contractors.

It is a way for the counties to make money -- they get a portion of the fees the companies charge people who attend the courses -- and law enforcement officials say the practice saves resources for fighting more serious wrongdoing.

But critics say the private companies violate the law when they send out letters warning check bouncers to attend classes or face prosecution. The critics add that in most states, it is not a crime to write a returned check unless there is intent to defraud. And federal law bars debt collectors from making false threats.

Nine Maryland counties, including Prince George's, Howard, Anne Arundel and Frederick, have turned to check restitution companies for such services. Some jurisdictions in southern Virginia are using an outside company, and Loudoun County is about to do so. The District has no check-restitution program but is considering one.

"I don't have to use prosecutors to take these cases to court," said Glenn F. Ivey, the state's attorney in Prince George's County. "The homicide rate is up, carjacking is up, sex offenses are up, armed robberies are up. I could probably use about 10 more prosecutors to handle violent crimes alone. So to the extent there's a program like this that allows us to get good results on restitution, it's a good way to go."

In Maryland, a contractor charges those who attend the courses a $35 administrative fee, which is split with the counties, and $125 more for the class itself, an eight-hour session on financial responsibility.

Local prosecutors say the threat of prosecution for not participating is legitimate. "The general rule is we prosecute" people who fail to repay bad checks, said Frank R. Weathersbee, the Anne Arundel state's attorney. Maryland law allows people 10 days to make good on a bounced check, he said. If check-restitution programs are curbed, he said, "you're just setting us back a step, making it easier for bad-check writing."

But the practice is being challenged in several lawsuits nationwide. "It's a scam that has evolved into big-time business," said Paul Arons, a California attorney who has been involved in five lawsuits against companies that run these programs.

The dispute has moved to Congress, where prosecutors want check-restitution programs exempted from federal debt-collection laws. Proposed legislation, designed to eliminate key legal arguments in lawsuits challenging the practice, has been approved by the House Financial Services Committee. Consumer advocates and debt collectors -- typically adversaries -- are fighting it.

The Maryland counties have hired American Corrective Counseling Services Inc. The largest of the few private check-restitution companies, ACCS operates in 140 counties in 16 states. ACCS President Michael Schreck said the company sends 10,000 to 15,000 notices a week and conducts about 2,500 classes a year.

Retailers typically allow consumers at least 10 days to make good on a bounced check and pay a service charge. After that, retailers may either continue to try to collect the checks on their own, send them to a debt-collection firm or forward them to the prosecutor's bad-check program.

When ACCS gets the checks, it sends check writers a notice using the local prosecutor's letterhead. ACCS's name is never used in communications with check writers or on the telephone hotline that ACCS operates.