California Pols to Debate Bad-Check Restitution Bill Today

California prosecutors and retailers today will be debating legislation before the state assembly’s public safety committee that would outsource bad-check restitution programs to outside collection firms and increase the fees the firms can charge people who bounce checks. Consumer groups oppose the legislation.

The bill, AB 2606 by Assemblyman Bill Emmerson, (R-Rancho Cucamonga), would increase bad check processing fees from $35 to $50, authorize inclusion of returned check fees in the processing fees, and increase to $1,200 the allowable aggregate total to be collected, up from $1,000. The bill also would increase the amount that the district attorney may pay victims for assessed bank fees to $15 per check, up from $10 per check.

“Every year California retailers lose billions of dollars in bad check losses,” the California Retailers Association said in a letter sent to committee members supporting the legislation. “For over 20 years, California’s retailers have been able to turn to their local District Attorneys for help to recover a portion of these losses after check writers have repeatedly ignored demands to make good on their checks.” Last year retailers recouped more than $16 million in restitution, which would “ultimately have been paid by all consumers through higher prices,” according to the association.

However, opponents says that the legislation would encourage private collection firms “to threaten innocent consumers with jail to coerce them into paying collection fees,” according to Deepak Gupta, a director with Public Citizen, a Washington consumer advocacy group.

Additionally, firms that win the contract with a local DA would have a competitive advantage because they would be the only ones who could use the power of the district attorney’s office to collect the fees, according to Gupta, a director with Public Citizen, a Washington consumer advocacy group.

In February, Public Citizen won a suit against American Corrective Counseling Services, claiming that its collection letters sent by ACCS were overly aggressive in tone and misrepresented that they came from the DA’s office ("ACCS Defends ‘Sovereign Immunity’ Case as Public Citizen Mulls Class Action Suit," Feb. 11). San Clemente, Calif.-based ACCS contracts with more than 200 district attorneys’ offices across the nation, including in California.