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When alleged shoplifters receive dollar-demanding lawyer letters

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My clients accused of shoplifting often receive letters from lawyers demanding payment to the store for the alleged shoplifting, even when the allegedly stolen merchandise has been recovered in completely re-sellable condition. The language in the letters that likely leads many people to pay is the promise of not seeking more money if the letter’s stated dollar amount is paid in settlement, coupled with the recipient’s fear of risking a worse outcome by not paying.

While I cannot provide a one-size-fits-all response to how to handle such letters, I consider the following when advising my clients about such letters:

– At least with my clients, these letters have been form letters from out-of-state collections lawyers whose letterhead does not state that the lawyer is licensed to practice in the state in question. Aside from questions about whether a lawyer is permitted by the lawyers professional conduct rules repeatedly to send collections letters regarding states where the lawyer is not licensed to practice law, such letters are harder to take seriously when the collections lawyer is going to have to arrange for another lawyer barred in the particular state to file any collections lawsuit.

– Do any lawsuits really follow non-payment on such collections letters? The stores having these collections letters mailed may generally be happy with the number of people who pay money on the letters, without going to the trouble of paying attorney fees for filing and pursuing a lawsuit, and proving the case (particularly if a conviction has not been obtained in the parallel criminal case) with witnesses and other evidence. However, I do not have statistics on how often these cases go to suit. Perhaps that depends on such factors as the company and lawyer involved, and the alleged dollar amount of the loss.

– At least in Virginia, such lawsuits are permitted by statute. Va. Code § 8.01-44.4. The foregoing Virginia statute limits recovery to twice the unpaid retail value (or $50 if that double value is below $50), no more than $350 if the merchandise is recovered and re-sellable, and no more than $15o in attorney’s fees in addition to the foregoing amounts. If the risk is low of being sued on such shoplifting demand letters in the first place, the foregoing numbers by themselves do not seem to be an incentive to pay on the demand letters.

– If the store actually files a lawsuit, the defendant will want to consider whether and when to settle the matter in order to avoid a civil money court judgment added to the defendant’s credit report, which is not desirable.

– The letter recipient’s criminal defense lawyer can consider contacting the collections lawyer seeking an agreement to pay on the letter in exchange for the store’s recommending no prosecution in the matter. However, one is left to wonder whether the collections lawyer has any influence in that regard.

– Will paying on the letter help any more with negotiating the parallel criminal case with the prosecutor, than simply offering up restitution money in settlement negotiations in the criminal case?

– Will not paying on the letter worsen the recipient’s prospects in criminal court? For my clients, the answer has been no.

– If the letter’s recipient does not want to receive any further demand letters, his or her lawyer can send the collections lawyer a letter saying something along the lines of: “You are hereby notified that at the time you sent my client your attached collection letter, the publicly available online court records already made clear that I am representing him in his parallel criminal court case. Based on that fact, the Fair Debt Collections Practices Act, and all other applicable provisions of the law, you are hereby directed to cease contacting my client.”

– Some people receive these collections letters before they already have a lawyer in any parallel shoplifting case. They will weigh whether to pay a lawyer for advice on how to handle the letter, or to simply pay or not pay on the letter.

These collections letters are part of retailers’ larger efforts to minimize loss from theft. For that reason alone, a person cannot expect to pick his or her nose or scratch his or her butt in a large store without being caught on security camera.