The Consumer Financial Protection Bureau (CFPB) announced yesterday that it has filed a lawsuit against debt collector BounceBack, Inc. for allegedly engaging in unlawful and deceptive debt collection practices. The complaint seeks an injunction to stop the unlawful and deceptive practices and the imposition of a civil money penalty.
The complaint alleges that since at least 2015, in the course of administering these bad-check pretrial-diversion programs, BounceBack used district-attorney letterheads to threaten more than 19,000 consumers with prosecution if they did not pay the amount of the check, enroll and pay for a financial-education course, and pay various other fees. BounceBack did not reveal to consumers that BounceBack — and not district attorneys — sent the letters.
BounceBack also failed to mention that district attorneys never prosecuted these cases. This left consumers feeling threatened — thinking that they faced jail time if they didn’t pay BounceBack what was allegedly owed.
Debt collectors like BounceBack, operating under the assumed authority of the state, have essentially attempted to revive the concept of debtor’s prisons by threatening individuals with jail time that almost never materializes. In fact, the threat of prosecution was a relatively empty one given that these cases rarely made it to any type of prosecution.
BounceBack, based in Kansas City, Missouri, operates bad-check pretrial-diversion programs on behalf of more than 90 district attorneys’ offices throughout the United States.
These programs are essential designed to assist the DAs in recovering some funds in bad check cases rather than requiring the DA to move forward with some form of prosecution.
Consumers who owe debt, even bad check debt, should beware when they receive collection letters. In cases like what occurred with BounceBack, the consumers should contact the DA’s office and verify the information in the letter.
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