SALEM — Debt collectors would have to stop using government stationery to send letters compelling people accused of writing bad checks to pay up, under a bill the Oregon House passed Friday.
The bill, which passed, 47-2, targets the practice of private companies using a district attorney's letterhead to send notices to people who write bad checks. The legislation would prohibit all public agencies and officials from allowing debt collectors to use their seal or letterhead.
Critics say the collection practice is deceptive and has misled people to believe they are dealing with a government agency. "It isn't appropriate," said Sen. Floyd Prozanski, D-Eugene, who spearheaded the legislation.
An investigation by The Oregonian last year found that thousands of state residents had received letters from collections companies that bear the name and seal of a local district attorney's office. The notices, however, are not being sent by a state prosecutor but instead by private companies under contract with the attorney's office.
A handful of Oregon prosecutors' offices contract with private companies to run bad check diversion programs. Some offices receive a percentage or fee from the companies for successful collections.
Some letters threaten recipients, warning that they could face jail time if they don't immediately pay their debt plus additional fees. The extra fees, which can be as much as $300, mostly pay for a financial education class that recipients are directed to take.
The bill now goes to the Senate, which approved an earlier version and must sign off on changes.