American Corrective Counseling Services (ACCS), based in San Clemente, Calif., agreed to a $2.55 million settlement in a class action law suit in Pennsylvania. While the company did not admit any wrongdoing, the lawsuit is the first in a series of lawsuits against the company.
In late 2007 and early 2008, ACCS lost a series of cases that exposed it to civil lawsuits. The firm argued it was shielded from civil cases due to its business relationships with public offices. However, after the company lost two cases in which it was held the company was subject to civil lawsuits, consumer attorneys began to assemble classes to initiate lawsuits against ACCS.
The recent lawsuit asserted ACCS sent out letters to consumers who bounced checks at various businesses. The letters appeared to come from district attorney offices around the state of Pennsylvania, warning recipients they were under criminal investigation for bouncing checks. ACCS asserted the consumer could resolve the matter if the debt was paid with a penalty and if the consumer attended a one-time educational course.
Although ACCS had contracts in place with numerous district attorneys to send such letters, the civil lawsuit alleged it was a deceptive and unethical practice to threaten consumers with criminal action when no action would likely be taken.
Approximately 15,000 Pennsylvanians were represented in the lawsuit by the Community Justice Project in Pittsburgh. Because ACCS filed for bankruptcy protection in January 2009, the company was not able to pay the $2.55 million settlement. Therefore, the Community Justice Project hopes to obtain the money from the company’s insurer.