The 23-year-old man and his fiancée were accused of shoplifting at the Portage Walmart in May.
They were approached by one of Walmart’s asset protection personnel and taken to a back room in the store. They were told that a security video clearly shows they undercharged or didn’t scan a few items at a self-checkout kiosk, the couple said. An offer to pay for the items was refused, they said.
I’m not naming the couple because they were not formally charged with any crime.
“If someone at the store really thought they were undercharging themselves, wouldn’t they have been arrested for shoplifting?” asked the Portage man’s grandmother, who contacted me about this incident.
Casey Staheli, a Walmart spokesman, told me, “There was not criminal prosecution because this was not a criminal case. Yet shoplifting still took place at that store.”
However, the total cost of the couple’s alleged shoplifting did not meet the store’s “threshold” for contacting police or for criminal prosecution, said Staheli, who would not reveal the dollar amount of that theft value threshold.
The couple thought the incident was behind them until they received a letter from an attorney one week later.
“As a result of this incident you are liable for a civil demand in the amount of $100,” stated Michael Ira Asen, an attorney from Greenvale, N.Y. “This civil demand is in accordance with Indiana Code 34-24-3-1 to 34-24-3-4 which allows retailers to recover a civil demand of such incidents.”
Asen’s law office was hired by Walmart to settle the civil demand, the letter states.
“You have a right to contest your liability in court,” it states.
The Portage couple didn’t know what to do. If they paid the civil demand, it showed guilt. If they didn’t pay it, they could be taken to court, which they couldn’t afford, they said.
“They were very shaken up,” the man’s grandmother told me.
Less than a month later, they received another letter from the attorney, whose website, recoverypay.com, describes his office as “a leader in civil recovery.”
With “SECOND NOTICE” stamped on top, the second letter states, “Your failure to pay this amount may cause Walmart Stores Inc. to consider further action to enforce its rights under the law.”
This follow-up letter again shook up the couple.
“The biggest problem for us is that, although my grandson and his fiancée were not guilty of shoplifting, and were told, ‘I’ll just let you off with a warning,’ their information was taken and put into the Walmart nationwide database,” the grandmother said.
This is how the New York attorney contacted them via the mailed form letters, and this is why this issue is not an isolated incident. Walmart customers across the state, and the country, in similar situations have complained about what’s characterized as “legalized extortion,” according to several news reports.
Earlier this year, Walmart announced it would end its controversial anti-shoplifting program at its 36 stores in Indiana. The program charges alleged first-time shoplifters a certain amount of money, from $100 to $400, as well as participation in an online educational course provided by the Utah-based Corrective Education Co.
In return, police would not be contacted.
“This appears to be nothing more than a legalized shakedown,” the grandmother told me.
Indiana Attorney General Curtis Hill issued a formal opinion earlier this year against the store’s deferment practice, which also is in use by other retailers across the country.
“The laws of Indiana grant to any retailer the unusual authority to detain and hold a private citizen. This modest grant of authority is made to make the individual wait for police to arrive,” Hill wrote. “When one deviates from these limited goals, one is undermining the public policy basis for allowing the detention to take place.”
Walmart’s Staheli noted, “We are simply pursuing what’s called civil demand and recovery based on Indiana state statute.”
According to Hill’s formal opinion, Indiana law allows retailers to detain suspected shoplifters for a reasonable amount of time to investigate a possible theft. However, the law doesn’t allow retailers to coerce suspects into a privately operated, for-profit program.
The retailer’s “restorative justice” deferment program also appears to run afoul of Indiana “substantive” criminal law as well, Hill wrote in his formal opinion.
“To Walmart’s considerable credit, this program has been voluntarily disengaged statewide,” Hill wrote on April 3.
On May 9 at the Portage Walmart, the store did not use its restorative justice program, which has ended, according to Walmart spokesman Randy Hargrove.
“That (incident) was referring to our civil recovery program, which is approved under state law,” Hargrove said in an email.
While there was no prosecution, the individuals were still subject to civil recovery fees, he said.
“Think of all the young, uninformed people, or even older people, who pay this extortion even if they are not guilty of anything, just to avoid future legal problems yet putting themselves at more risk of legal problems,” the Portage man’s grandmother said.
A 2013 Associated Press story on this issue stated retailers do not disclose how much money has been made from these civil damages letters by third-party attorneys. However, one Florida-based law firm represented Walmart, Home Depot and other major retailers said it mails roughly 115,000 letters per month, the AP story states.
In a recent twist to this issue, a class-action lawsuit has been filed in federal court against Corrective Education Co. and its retail clients.
“Despite their glittering credentials, the program’s producers are all participants in a long-running, highly profitable extortion scheme that has extracted millions of dollars from thousands of poor, desperate people across the country,” the complaint states.
The lawsuit was prompted by a mother shopping for a birthday barbecue with her children at a Walmart store in California. She was accused of not paying for hot dog buns and a water bottle at a self-checkout kiosk.
I have a feeling that the Portage couple is not going to pay that $100 bill to the New York attorney.
