The Third Circuit Court of Appeals Thursday said that a collection agency violated the Fair Debt Collection Practices Act (FDCPA) when it sent a collection letter with the debtor’s account number visible through the transparent address window of an envelope.
The three-judge appellate panel, in a precedential opinion, unanimously overturned a district court ruling in Douglass v. Convergent Outsourcing, a putative class action. The question before the Court was whether the visible account number ran afoul of the FDCPA’s section 1692f(8).
That section of the law prohibits using “any language or symbol, other than the debt collector’s address” on an envelope containing a debt collection letter. Although the account number in question was not on the envelope itself, the position of the number on the letter made it visible through the envelope’s window.
Convergent won a summary judgment in the Eastern District of Pennsylvania ruling that the account number was “benign language.”
On appeal, Convergent argued that Douglass’s account number is a meaningless string of numbers and letters, and its disclosure has not harmed and could not possibly harm Douglass. Using cases from other circuits, and even an FTC Staff Commentary from 1988, the defendant argued that the FDCPA does allow for “harmless words or symbols” on the envelope, with notable examples being “Personal” or “Confidential.”
The main takeaway from the precedents and commentary was that impermissible symbols or language on an envelope should indicate that the contents pertain to debt collection.
But the Circuit panel found that “the account number is not meaningless — it is a piece of information capable of identifying Douglass as a debtor.” Going so far as to note that the FTC Staff Commentary was “unpersuasive,” the opinion read, “The account number is a core piece of information pertaining to Douglass’s status as a debtor and Convergent’s debt collection effort. Disclosed to the public, it could be used to expose her financial predicament. Because Convergent’s disclosure implicates core privacy concerns, it cannot be deemed benign.”
The panel noted that the question before them may have been made easier as the plaintiff was seeking only statutory damages. It therefore did not need to make a determination on actual damages, leaving it up to the district court to decide how to proceed in the class action.
Interestingly, the case initially cited the presence of a visible QR Code as a potential violation. The QR Code could also be seen through the window, and when scanned, revealed slightly more information than was visible in print, including the debtor’s account balance. But Douglass no longer pressed the QR Code issue, so the 3rd Circuit panel did not decide whether that was a violation of the FDCPA.
The case now goes back to the district court for further action.