Legal Environment 4th Edition by Jeffrey Beatty, Susan Samuelson

Exercise 6

Check Enforcement Unit, Inc. (CEU), was in the business of helping merchants collect on bad checks. When a merchant received a dishonored check, it would forward the check directly to CEU, which would then send out a series of notices to the check writer, using the letterhead of the local sheriff's department. CEU had permission to use this letterhead, but the sheriff's department was not otherwise involved in the collection effort. Only after the three notices had been sent, and no payment received, would CEU notify the sheriff's department about a bad check. Even then, the check did not become a criminal matter until the sheriff's department assigned a complaint number. After Sherri Gradisher bounced a check for $81.30 at Doug Born's Smokehouse, she received three notices from CEU. Was CEU in violation of the law?