” Indeed, First Assistant District Attorney Cliff Herberg described the hot-check division as “an assembly line process” in which “the vast majority of [cases] don’t get prosecuted.”
“Well, we send a letter out,” Herberg told the Observer. “That’s part of the services that are offered.” The DA, he said, can’t decide which merchants to work with or not, even if “payday lenders may not be the favorite in the community.”
Herberg said his office won’t prosecute cases in which a payday loan is involved unless there’s a clear case of fraud or deception. “If it’s for a loan, they’re not going to submit them to a criminal prosecution, it would be for collections purposes only.” However, the collections letters from the Bexar County DA threaten arrest, jail and criminal prosecution-an inconsistency that the credit commission noted in its correspondence with Marpast.
“You would think that if this was a legitimate fraud or suspected fraud or suspected theft by check, that would’ve come up somewhere in the letter” from Marpast to the credit commission, Tillman said. “Because [Marpast] knew and the DA for that matter knew it was bullshit. It was an attempt to collect on a debt by coercion.”
There were other details that bothered Tillman. He also bristled at the thought that the Bexar County DA’s office was profiting from its collections letters.
“When you multiply a $140 processing fee times a 1,000 or 2,000 or 3,000 people who are delinquent, that’s a hell of a lot of money. That’s a way of putting money in your coffers. And all you’ve got to do is put something down on your letterhead.”
Marpast would later tell the state Office of Credit Consumer Commissioner in writing that it had submitted the debt to the Bexar County DA “for collection purposes
In all, the Bexar County DA has accepted more than 1,400 criminal complaints from payday lenders since 2009 totaling almost $373,000, according to records from the DA’s office obtained by the Observer.
The Office of Credit Consumer Commissioner has occasionally told payday lenders to stop seeking criminal charges against customers, but the agency has no jurisdiction over judges or prosecutors. After Tillman wrote to the consumer credit commissioner in August to complain about his situation, the agency investigated. In a September letter to Marpast, the agency instructed the company to “advise the DA’s office to cease collection activities on all checks” forwarded by Marpast. This should keep Tillman and other borrowers out of jail.
Since the Texas Legislature assigned the agency the duty of overseeing payday and title loans in 2011, it’s been stretched thin. The consumer credit commission has 30 field examiners to cover 15,000 businesses, including 3,500 payday and title lenders.
“Although I’d love to take a bunch of folks and go at that one issue,” said Aguilar, the director of consumer protection, “I don’t have that luxury at the moment.” Aguilar said his team finds violators when consumers complain or when the agency’s examiners visit one of the stores for an inspection. Only two customers, including Tillman, have ever complained to the commission.
“It’s a difficult situation,” Aguilar said. “People get put in tough situations where they’re just not armed with enough knowledge to deal with [payday lenders], and they get intimidated. If somebody calls you press this link here now and tells you that you’ve violated the law in a criminal manner, that’s going to get your attention and shake you up.”
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