When Bainbridge Island resident Roz Terrill wrote a $41 check to a local Goodwill to buy clothes for her children, she had no idea it would lead to threats of criminal prosecution.

Because of a banking mix-up, Roz’s check did not clear. Months later, she received a letter that looked like it had been sent by the Kitsap County Prosecuting Attorney. Bearing a prosecutor’s seal at the top, it said that Roz had been accused of a crime and, in large type, that, “to avoid the possibility of criminal charges being filed,” she had to pay the amount of the check plus $185 in fees.

What Roz didn’t realize was that the letter was really sent by Bounceback, Inc., a for-profit Missouri-based debt collection company that had paid the real prosecutor’s office for permission to use the prosecutor’s seal to threaten consumers with criminal prosecution. There is no evidence that the prosecutor reviewed any evidence related to Roz’s check or that they would prosecute her if she did not pay Bounceback’s fees. But Roz ultimately ended up paying the check plus nearly $220 in fees because that was the only way she could stop the threats and gain peace of mind.

Wodena Cavnar, a retiree in Moses Lake, and Linda Parks, a wheelchair-bound retiree living in Sequim, went through similar experiences. “When I first received the letter that I thought came from the prosecutor, I was frightened about having to go to court, and worried that police would come to arrest me,” said Linda. “When I later learned that the letter was from a debt collector, not the prosecutor, I was very disappointed in our county officials.”

On July 18, 2014, these three Washington consumers filed a class action lawsuit against Bounceback, Inc. in federal court in Spokane. Bounceback’s operations are much like those of any other high-volume debt collector: It solicits its business from large national retailers and other merchants, receives electronic information about unpaid checks directly from those merchants, and sends out standardized collection notices to consumers.

But, according to the lawsuit, there is one crucial difference: Under Bounceback’s so-called “Check Enforcement Program,” county prosecutors rent out the prosecutor’s seal and letterhead to Bounceback in exchange for a cut of the collection fees, thereby cloaking ordinary civil debt collection under a sham “criminal diversion” program.
“Making a phony threat to put someone in jail unless they pay you money is called extortion,” said Beth Terrell of Seattle, attorney for the plaintiffs. “Washington prosecutors should be going after those doing the extortion, not teaming up with them.”

Despite Bounceback’s use of the county prosecutor’s name and authority to coerce payments, the prosecutors exercise no meaningful control over Bounceback’s day-to-day collection activities.  Bounceback’s threats of criminal prosecution are made without any prosecutor having actually investigated the circumstances to determine whether an unpaid check was written with criminal intent or was simply an innocent mistake.  Moreover, when Bounceback sends its collection letters, it cannot know whether a consumer will be prosecuted for failing to pay its steep collection fees, as the letters represent.

“It is astonishing that prosecutors are renting out their name and authority to a private debt collector,” said Deepak Gupta of Washington, DC, one of the lawyers for the plaintiffs. “It’s even worse that consumers like our clients, who have done nothing wrong, are being forced to pay hundreds of dollars in illegal fees because of false threats of criminal prosecution.”

The plaintiffs allege that Bounceback’s collection practices violate both state and federal law. They seek to represent a class of consumers who have received collection letters from Bounceback, to stop Bounceback’s deceptive debt-collection practices, and to recover the exorbitant fees consumers have paid to Bounceback.

Case Contact Information

Class Counsel

  • Terrell Marshall Law Group PLLC

Beth Terrell

Erika Nusser

  • Gupta Beck PLLC

Deepak Gupta

  • Nicholas Power