Supreme Court holds that private attorneys’ use of state Attorney General’s letterhead in collection letters is not deceptive, but follows amicus brief in declining to reach broader issues that would limit protections for consumers.
The Ohio Attorney General hires private attorneys to collect overdue debts for the state. Consumers challenged the private attorneys’ use of the state AG’s letterhead in their collection letters, arguing that this practice violated the Fair Debt Collection Practices Act (FDCPA), which prohibits deceptive practices by debt collectors. Public Good joined a brief in support of the consumer plaintiffs – filed on behalf of national consumer advocacy organizations – that urged the Court to reject two proposed legal standards that would weaken the protections of the FDCPA: (1) requiring plaintiffs to establish that communications were “materially misleading”; and (2) requiring plaintiffs to establish that an average consumer would likely be deceived (courts in FDCPA cases have generally asked whether the “least sophisticated consumer” would likely be deceived). Both proposed standards would have made it more difficult for vulnerable consumers to prevail against deceptive practices.
The Supreme Court held that use of the letterhead was not deceptive, contrary to the assessment of attorneys who work with debt collection defense clients. However, in a victory for vulnerable consumers, the Court explicitly declined to consider whether a materiality provision applied or what the proper standard is for judging the deceptiveness of communications from debt collectors, leaving lower courts free to continue to apply the “least sophisticated consumer” standard and to continue not to require evidence of materiality.
785 F.3d 1091 (6th Cir. May 8, 2015), and reversed and remanded, 136 S.Ct. 1594 (May 16, 2016).