Threats on traffic camera tickets violated law

CEDAR RAPIDS - Thousands of automated traffic camera tickets threatened speeders with black marks on their credit reports if they didn't pay, even though the practice actually had stopped months earlier.

This threat violated state law, said Jessica Whitney, director of the Consumer Protection Division of the Iowa Attorney General's Office.

She pointed to a section of the Iowa Fair Debt Collection law, which prohibits 'fraudulent, deceptive, or misleading representation or means to collect or attempt to collect a debt.”

'You can't threaten to do something that you cannot do or are not able to do,” Whitney said.

Cedar Rapids acknowledged unpaid traffic camera tickets can no longer be reported to credit agencies, and has changed the wording.

Getting people to pay the tickets has been an issue since the camera program launched in Cedar Rapids in 2010. One in five tickets issued aren't paid.

Reporting unpaid tickets as bad debt had been the primary enforcement mechanism and had been legal in Iowa. That changed this year.

In May, credit reporting agencies reached a settlement with 31 state attorneys general, including Iowa's, to enhance consumer protections for credit reporting. This included prohibiting using tickets and fines in credit scores.

The Gazette reported in August on the potential impact of the settlement on Cedar Rapids traffic camera tickets. The city avoided questions, though, saying its debt collector, Harris & Harris Ltd. of Chicago. 'has assured us they are compliant with all state requirements with regards to collections and reporting.”

The Iowa Attorney General's Office couldn't confirm then if the settlement applied to camera tickets, though Whitney said this week it does.

In an interview in September, city Finance Director Casey Drew said Harris had stopped reporting bad debt to credit agencies in May because of the settlement.

But up until Aug. 31, tickets continued to state: 'Failure to pay the civil fine or to appeal this determination within (30) calendar days ... you may be subject to formal collection procedures including, but not limited to, being reported to a credit reporting agency, and a civil lawsuit.”

An Attorney General'' Office investigator notified Cedar Rapids this week that using the inaccurate threat violates state law. Cedar Rapids had already changed the wording, Whitney said.

The police department worked with the traffic camera vendor, GATSO USA, to eliminate the wording on citations, city spokeswoman Maria Johnson said.

Johnson said the incorrect language was removed Aug. 31, but she did not know how many tickets had been issued. But they are still valid tickets, she said.

Ira Rheingold, president of the National Assocation of Consumer Advocates of Washington, D.C., said consumers may be able to counterclaim, which could offset the amount owed.

'While the city's act wouldn't void the ticket, it certainly creates a legal claim for the consumer,” Rheingold said.

Traffic camera programs have come under fire in Cedar Rapids perhaps as much as anywhere. Locations on Interstate 380, said to be the only such permanent cameras on interstates in the nation, issue more than 90,000 tickets a year.

Cedar Rapids is suing, along with other cities, the Iowa Department of Transportation to block its order to move or take down some cameras.

Critics contend the cameras are a money making scheme, while defenders say they make roads safer and save law enforcement resources. The Iowa DOT backs the majority of camera locations in the state.

Early into the Cedar Rapids program, the city hired Harris to collect after many tickets were going unpaid. It decided to report unpaid tickets to credit agencies.

'If there's no teeth behind forcing people to pay the fines, there's no deterrent at all. So there's no sense in having the cameras up,” then-Police Chief Greg Graham said at the time.

Since the program launched, 99,174 tickets worth $7.7 million, out of more than 500,000 issued, have been sent to collections. About 76 percent of those are Iowa drivers.

The tickets don't count toward driving records or automobile insurance. Legal action for not paying traffic camera tickets is possible, but may not be cost-effective since most tickets cost $75.

Even with the threat of bad credit, Harris has struggled to collect. It has a collection rate of about 15 percent, or $1.1 million, leaving 79,915 tickets worth $6.3 million outstanding.

Harris has been paid $216,870 to date, with a contract cap of $500,000.

Drew said the collection rate has improved over time, up from 9 to 20 percent over three years.

Drew said it is too early to say what effect the credit report ban will mean for collections.

'Harris & Harris will continue to look at if they can settle up, we'll potentially look at a state program with the DAS, and we always have the option of taking people to court,” Drew said, noting legal remedies can be used on a case-by-case basis but have not yet.

Drew said the city is exploring debt collection through the state's offset program, managed by the Iowa Department of Administrative Services.

Caleb Hunter, a spokesman for DAS, said cities have been able to use the program since 2006 to collect debt and 258 cities participate, although not Cedar Rapids.

Through the program, the DAS can withhold portions of tax returns, casino winnings or payments to vendors to satisfy debts to cities and public agencies.

The program may have limited effectiveness on unpaid tickets from out of state, though. Hunter said the debts are collected only if a payment is made from the state of Iowa.

What's happening to unpaid tickets:

Sent to debt collector: 99,174

Active accounts: 79,915

Paid in full: 14,685

Canceled: 3,126

Deceased: 70

Legal action taken: 342

Amount collected: $1.1 million

Amount outstanding: $6.35 million

Who's not paying tickets?

Iowa: 76,281

Illinois: 6,262

Minnesota: 4,841

Missouri: 1,834

Texas: 842

All other states: 9,114