District Attorney’s Offices Allow Debt Collectors to Use Federal Prosecutors’ Letterhead

The New York Times recently ran a story about a disturbing new debt collection practice.  Federal Prosecutors are now allowing debt collectors to write collection letters on official Federal Prosecutor letterhead.  Underhanded debt collection tactics are nothing new (we have posted on this topic before), but this seems particularly problematic.

Debt collection letters are issued before any legal proceeding or investigation has begun.  As we have noted, debt collectors often lack the evidence needed to win at trial.  Additionally, sometimes borrowers are victims of accounting mistakes, in which case the borrowers don’t owe the debt the collectors are claiming.  If debt collectors use Federal Prosecutors’ letterhead, the borrowers may get the impression that their case has already been decided – especially if the letter claims that the borrower must either pay the debt or face jail time.  Borrowers may feel that they have no choice but to pay, even though no court proceeding has been filed against them, and even if the debt collector lacks the evidence needed to sustain the case.  At the very least, since the letters arrive on Official Federal Prosecutor letterhead, borrowers may believe that Federal Prosecutors have made some minimal investigation into their case, and have decided that the case has merit, when the reality is that the debt collectors have simply been allowed to use official letterhead to scare borrowers.

The important thing to remember is that debt collectors cannot collect debts without a judge’s order.  If debt collectors can’t present evidence, provide the borrower with certain information, follow court procedures, and comply with debt collection laws, then they cannot require a borrower to pay a debt, and certainly can’t sent a borrower to jail – no matter what letterhead they use.

If you are being sued by a debt collector, the Law Firm of Vaughn, Weber & Prakope, PLLC may be able to help.  If you have questions, call 516-858-2620 today to schedule a free consultation.

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