Longform

Prosecutors Team With Debt Collectors to Terrorize Consumers

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For now, the only oversight comes from those making money on the deals: the district attorneys themselves. And they show little interest in policing the industry.

Take the Minnesota company once known as Financial Crimes Services. In 2009 it was sued for violating the Fair Debt Collection Practices Act. The company agreed to pay $75,000 in penalties and court costs.

Last year, it changed its name to Check Diversion Program, and it's still operating throughout Minnesota and Wisconsin. "We're not a debt-collection company, but a diversion program," says CEO Scott Adkisson. "We send out approved letters. And it's the DA's decision who gets them, not ours. We just manage the program."

The evidence suggests otherwise. In Minnesota's Goodhue County, the program is run by the Red Wing Police Department, which referred inquiries back to Adkisson. Minnesota Attorney General Lori Swanson would not respond to interview requests, either.

Levin believes this lack of oversight may be the key to dismantling the programs: If prosecutors aren't reviewing the cases, collection agencies aren't legally eligible for immunity.

In the meantime, victims like Orr, Schwarm and Hirth have little recourse but to hire lawyers, paying thousands to defend themselves for bouncing $50 checks at the grocery store.

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Denise Grollmus
Contact: Denise Grollmus