Debt collectors and prosecuting attorneys’ letterhead

It took about five years, but the American Bar Association (ABA) released an opinion stating that prosecuting attorneys shouldn’t give their letterhead to bill collectors.

According to a formal opinion released by the ABA on Nov. 12, it has become increasingly common for bill collectors to arrange to borrow the official letterhead from local prosecuting attorneys offices and send threatening letters to debtors.

The tactics used by those bill collectors are wonderfully straight forward. Get some letterhead from the local prosecutor’s office, send a letter to a debtor threatening criminal trouble if a bill hasn’t been paid, tack on some fees and costs that dwarf the amount of the original debt whenever possible, sit back and get paid.

That practice has been going on since at least 2009 according to news articles referenced in the ABA opinion. (Link here for a copy of the opinion.)

It seems odd for the ABA to take five years to react to something that just seems so wrong on the surface, but at least an opinion has been issued that should curb the practice of letting debt collectors act like prosecuting attorneys for the sole purpose of scaring money out of people.

Specifically, the ABA opinion states that prosecutors giving letterhead to bill collectors violate Model Rules of Professional Conduct 8.4(c) and 5.5(a). Rule 8.4(c) states that “it is professional misconduct for a lawyer to engage in conduct involving dishonesty, fraud, deceit or misrepresentation.”

Prosecutors who give office letterhead to debt collectors violate that rule because they ought to know that letters will be sent “deploying the apparent authority of a prosecutor to intimidate an individual. They carry with them the implication that the prosecutor … (has) reviewed the facts and found that a crime has been committed and criminal prosecution is warranted,” the opinion states.

Naturally, that level of deceit is an ethical no-no – a fact that was established earlier when a lawyer was found to have violated Rule 8.4(c) by selling his letterhead to bill collectors who then sent out letters threatening legal action unless debts were paid.

As for Rule 5.5(a), that one states that one prohibits the unauthorized practice of law. Simply put, no one but a licensed attorney can engage in the practice of law. Since debt collectors were sending out letters threatening debtors with criminal prosecution, that rule was violated as no prosecutor had reviewed the facts given rise to the letters and no debtors were truly facing potential criminal prosecution. Prosecutors letting debt collectors use official letterhead, then, were aiding and abetting the unauthorized practice of law, the opinion state.

The ABA pointed out that a similar scheme had been used and found in violation of Rule 5.5(a) in the past. The ABA cited an opinion issued way on back in 1932 that found an attorney was in violation of that rule because he sold his signed letterhead to a business so that company could threaten people who owed it money with legal action.

In other words, the Nov. 12 ABA opinion is based on conclusions reached years ago. Things were quite a bit worse this time around because the letters at issue threatened criminal prosecution rather than some vague legal action.