Current as of: February 2010 (a) In general
(1) Treatment of certain private entities
Subject to paragraph (2), a private entity shall be excluded
from the definition of a debt collector, pursuant to the
exception provided in section 1692a(6) of this title, with
respect to the operation by the entity of a program described in
paragraph (2)(A) under a contract described in paragraph (2)(B).
(2) Conditions of applicability
Paragraph (1) shall apply if -
(A) a State or district attorney establishes, within the
jurisdiction of such State or district attorney and with
respect to alleged bad check violations that do not involve a
check described in subsection (b), a pretrial diversion program
for alleged bad check offenders who agree to participate
voluntarily in such program to avoid criminal prosecution;
(B) a private entity, that is subject to an administrative
support services contract with a State or district attorney and
operates under the direction, supervision, and control of such
State or district attorney, operates the pretrial diversion
program described in subparagraph (A); and
(C) in the course of performing duties delegated to it by a
State or district attorney under the contract, the private
entity referred to in subparagraph (B) -
(i) complies with the penal laws of the State;
(ii) conforms with the terms of the contract and directives
of the State or district attorney;
(iii) does not exercise independent prosecutorial
discretion;
(iv) contacts any alleged offender referred to in
subparagraph (A) for purposes of participating in a program
referred to in such paragraph -
(I) only as a result of any determination by the State or
district attorney that probable cause of a bad check
violation under State penal law exists, and that contact
with the alleged offender for purposes of participation in
the program is appropriate; and
(II) the alleged offender has failed to pay the bad check
after demand for payment, pursuant to State law, is made
for payment of the check amount;
(v) includes as part of an initial written communication
with an alleged offender a clear and conspicuous statement
that -
(I) the alleged offender may dispute the validity of any
alleged bad check violation;
(II) where the alleged offender knows, or has reasonable
cause to believe, that the alleged bad check violation is
the result of theft or forgery of the check, identity
theft, or other fraud that is not the result of the conduct
of the alleged offender, the alleged offender may file a
crime report with the appropriate law enforcement agency;
and
(III) if the alleged offender notifies the private entity
or the district attorney in writing, not later than 30 days
after being contacted for the first time pursuant to clause
(iv), that there is a dispute pursuant to this subsection,
before further restitution efforts are pursued, the
district attorney or an employee of the district attorney
authorized to make such a determination makes a
determination that there is probable cause to believe that
a crime has been committed; and
(vi) charges only fees in connection with services under
the contract that have been authorized by the contract with
the State or district attorney.
(b) Certain checks excluded
A check is described in this subsection if the check involves, or
is subsequently found to involve -
(1) a postdated check presented in connection with a payday
loan, or other similar transaction, where the payee of the check
knew that the issuer had insufficient funds at the time the check
was made, drawn, or delivered;
(2) a stop payment order where the issuer acted in good faith
and with reasonable cause in stopping payment on the check;
(3) a check dishonored because of an adjustment to the issuer's
account by the financial institution holding such account without
providing notice to the person at the time the check was made,
drawn, or delivered;
(4) a check for partial payment of a debt where the payee had
previously accepted partial payment for such debt;
(5) a check issued by a person who was not competent, or was
not of legal age, to enter into a legal contractual obligation at
the time the check was made, drawn, or delivered; or
(6) a check issued to pay an obligation arising from a
transaction that was illegal in the jurisdiction of the State or
district attorney at the time the check was made, drawn, or
delivered.
(c) Definitions
For purposes of this section, the following definitions shall
apply:
(1) State or district attorney
The term "State or district attorney" means the chief elected
or appointed prosecuting attorney in a district, county (as
defined in section 2 of title 1), municipality, or comparable
jurisdiction, including State attorneys general who act as chief
elected or appointed prosecuting attorneys in a district, county
(as so defined), municipality or comparable jurisdiction, who may
be referred to by a variety of titles such as district attorneys,
prosecuting attorneys, commonwealth's attorneys, solicitors,
county attorneys, and state's attorneys, and who are responsible
for the prosecution of State crimes and violations of
jurisdiction-specific local ordinances.
(2) Check
The term "check" has the same meaning as in section 5002(6) of
title 12.
(3) Bad check violation
The term "bad check violation" means a violation of the
applicable State criminal law relating to the writing of
dishonored checks.Legislative History ________________________________________________________________________
See also: State Laws: Debt Collection Practices
Related Articles: Debt Collection Practices
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