The Only Winners In California’s Fines And Fees System Are Private Debt Collectors

The Appeal – By Teresa Mathew

San Francisco just became the first city in the nation to stop charging court fines and fees, but the rest of the state has a long way to go.

Kim Lacey couldn’t understand how unpaid traffic tickets had cost her so much. Over the last decade, Lacey has had her wages garnished, her tax returns seized, her credit score ruined, and her driver’s license suspended because of outstanding court fines and fees. She has paid approximately $5,400 to Alameda County, California, where she lives, since she received her first ticket in 2008, she told The Appeal. And she sees no end in sight from the hounding of a system which has emotionally and financially bled her dry.

Fines and fees create a “lose-lose scenario” both for counties and their residents, according to a report released in May by the California Reinvestment Coalition (CRC). The system places a disproportionate burden on the poor, and then fails to recoup most of the money it seeks. For example, over the course of six years, San Francisco was able to collect only 17 percent of the $15 million it demanded in court debt.

But yesterday, the city officially became the first in the nation to stop charging people discretionary criminal justice fines and fees. Some of the charges it is eliminating are for probation, booking, restitution, and costs for alcohol testing and participation in monitoring and home detention programs. These costs, often hundreds or thousands of dollars, historically created an additional stumbling block for anyone coming out of jail or prison.

“These financial burdens frequently hit individuals at the precise moment they are trying to turn their lives around,” San Francisco’s ordinance reads.

But Californians in other parts of the state, like Lacey, are still subjected to 684 criminal justice financial penalties, according to the CRC report. Most of these are fines intended to be punitive, like a speeding ticket. Fifty-seven are fees, user charges tacked on to help fund the courts. These debts can pile up quickly; a $100 ticket for running a red light in California, for example, comes with an additional $390 in fees.

As time passes, interest compounds and late-payment fees get added to delinquent debt, making it even harder for those who fall behind to pay  what they owe.

But if communities and residents aren’t benefiting from the current arrangement, who is? As it stands, said Joanna Weiss, co-director of the Fines and Fees Justice Center, the system is giving incentives for private firms to profit off poor communities. Many California counties contract with private debt collection agencies.

“In California, [debt collection agencies] are getting commissions of 12 to 18 percent, which is on top of debt we don’t even know if people can afford to pay,” Weiss said.

And that’s just for newly delinquent debt. “Commission fees encourage private debt collectors to collect on debt over five years old, and to allow debt to age so that they can collect on it later and receive higher commission fees,” according to the CRC report. Once the delinquent debt has aged over five years, collectors’ commission fees can go up to nearly 26 percent.

Many private collection agencies are authorized by the state to pay themselves back for operating costs before they distribute money to state and local governments. According to the report, between 2013 and 2014, such costs amounted to $114 million, or 6 percent of the total fine and fee revenue.

Because debt collection agencies are a third party separate from the courts, people’s records often fall through the cracks. According to her attorney, Lacey ended up receiving a refund of nearly $800 because, with the help of the East Bay Community Law Center, she was able to show the court that Alliance One—the collection agency used by the Alameda County Court—had been asking for payments on tickets Lacey had already paid.

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