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U.S. Supreme Court: Debt Collectors Can Use Government Stationary

The Supreme Court unanimously ruled Monday that outside lawyers hired by the Ohio Attorney General's office can attempt to collect debt from Ohioans using letters on Attorney General letterhead.

By Jessica Wehrman

The Supreme Court unanimously ruled Monday that outside lawyers hired by the Ohio Attorney General's office can attempt to collect debt from Ohioans using letters on Attorney General letterhead.

Ohio, like many other states, has used outside law firms to help collect debt. Letters sent to those in debt were, for the most part accurate. They included the amounts owed, stated that the debts were owed to the state and explained that an outside firm had been hired to collect the debts.

But the Sixth Circuit Court of Appeals ruled on the case -- Sheriff v. Gillie -- that use of the attorney general's letterhead rather than the letterhead of the outside firms violated the Fair Debt Collection Practices Act, a 1977 law that aims to establish legal protection from abusive debt collection practices and promote fair debt collection.

The case was a rare one in which the Consumer Financial Protection Bureau weighed in. The bureau, headed by former Ohio Attorney General Richard Cordray, filed an amicus brief on behalf of the plaintiffs.

"Use of Ohio Attorney General letterhead...falsely implied that special counsel worked within that government office, when in fact they had been retained as independent contractors," the bureau wrote in an amicus brief filed to the court.

Plaintiffs -- and, by extension Cordray and the CFPB -- had argued that the outside attorneys' use of Ohio letterhead was misleading and an inappropriate invocation of the state in order to collect debt. They argued that unsophisticated consumers might not understand who was actually asking them to repay the debt.

The state, meanwhile, argued that the outside lawyers are acting as officers of the state and are should be treated as such under the law.

Ohio is far from the only state that uses outside lawyers to collect debts; states including Michigan, Idaho, Hawaii and nine other states signed onto a brief supporting the state's case.

In the ruling, Justice Ruth Bader Ginsburg said that the letterhead was appropriately clear for consumers.

"Far from misrepresenting special counsel's identity, letters sent by special counsel accurately identify the office primarily responsible for collection of the debt (the Attorney General), special counsel's affiliation with that office, and the address (special counsel's law firm) to which payment should be sent," she wrote.

(c)2016 The Columbus Dispatch (Columbus, Ohio)

Caroline Cournoyer is GOVERNING's senior web editor.
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