Collection Services Tacking On Fees To Bay Area Bounced Checks

PLEASANTON (CBS 5) - Bouncing a check has never been a good thing to do, but the penalty for writing a bad one might now be harsher than it was before with district attorneys contracting with debt collection services.

Angela Yartz, a bookkeeper who lives in Pleasanton found out she had bounced a check to Walmart when she got a call from someone claiming to be with the Alameda County District Attorney. The call was followed up with letters, all carrying the official seal of the DA. But Yartz, wary of those who might try to steal her credit, was hesitant to take action.

It was not until Yartz faced threats of incarceration before she called the DA and learned that all the correspondence was authentic.

"I thought it was just someone trying to get their hands on my information and trying to get me to pay more than what was necessary," Yartz

Letters are sent to people across the country and here in the Bay Area on district attorney letter head, requesting debtors to not only pay the amount owed but much more.

Still Yartz was surprised that her check written to Walmart for less than $50 had ballooned into a debt over more than two hundred. She was concerned when she learned that most of the money would go to a third party: Corrective Solutions a company, the Alameda County District Attorney as well as others in the Bay Area contract with to resolve bad debts.

Nancy O'Malley, the Alameda County District Attorney insists Corrective Solutions in not merely a debt collector: " They run a diversion program to help people manage their money."

O'Malley adds her office made numerous attempts to track down Yartz before referring her case to Corrective Solutions.

But those who say they have never bounced a check before think the punishment does not fit the crime.

Kelly Robbins of Grass Valley, in Nevada County, not only paid her debt but was forced to attend a day-long financial responsibility class. Robbins paid one hundred and eighty dollars and took a day off work in addition to paying her original debt.

"I think I was punished too severely," said Robbins, who added that she did not like the thought of most of her money going to a private company instead of to her creditor or even the county where she lives.

But whether or not this practice is popular, counties nationwide are using it to keep these cases out of court. In the Bay Area, San Mateo and Santa Clara Counties all contract with Corrective Solutions.

Numerous attempts to gain comment from the company were ignored. Some consumer advocates said that's a sign that they are not the best stewards for public agencies.

"In essence, they have rented out their stationary to let these collection goons get a piece of the action," says Joe Rideout, a San Francisco based consumer advocate who remains dubious as to whether District Attorneys' Offices properly review the cases before referring them. "No one at the District Attorney Office has even looked at these actual debt much less determine if a crime has been committed."

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