In a decision filed on October 23, 2015, U.S. District Judge Katherine Polk Failla has granted Credit Management LP (CMI)’s motion to dismiss a case against the firm filed by Joy Gardner.

The Plaintiff Joy Gardner received a debt collection letter from the Defendant in September 2014. Appearing through a glassine window were the consumer’s name, address, and a string of 50 alphanumeric characters. Contained within that string was a nine-digit internal tracking number assigned to Gardner’s account by CMI.

The envelope included a return address but did not display the debt collector’s name, nor did it give any indication of the subject of the correspondence.

In November 2014, Gardner filed a class action lawsuit under the FDCPA, alleging that the company had included “impermissible language or symbols” on the envelope. CMI moved for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c) on March 30, 2015, which was granted last month.

The Court, in this case, said that a literal reading of the language of § 1692f(8) would clearly prohibit the inclusion of an internal tracking number visible from outside an envelope, as this would be “language or symbol, other than the debt collector’s address.” However, the court continued, “a literal application of the statute would similarly prohibit the inclusion of the recipient’s name, her address, or preprinted postage, which would – as several courts have recognized – yield the absurd result that a statute governing the manner in which the mails may be used for debt collection might in fact preclude the use of the mails altogether.”

Numerous courts in recent decades have clearly indicated that the spirit of the FDCPA § 1692f(8) was meant to prevent a consumer’s embarrassment by having her financial situation revealed to friends, neighbors, or an employer; and that the appearance of a notation that does not suggest the purpose of the communication does not violate this spirit.

The Court in this case states that, “to a person unfamiliar with CMI’s internal reference system, it is not even clear which numbers within the string constitute the tracking number at issue here. The string of characters certainly does not convey to a casual or interested observer — and certainly not to the ‘least sophisticated consumer’ — that Gardner is in debt.”

The Plaintiff cites Douglass v. Convergent Outsourcing decision (3d Cir. 2014), which ruled against the collection agency, stating that the presence of a QR code in addition to an account number, was sufficient to reveal the existence of a debt, because anyone could scan the QR code with a smart phone equipped with an appropriate application, and learn the amount of the debt associated with the consumer’s name and account number.

The envelope sent to Gardner did not include a QR code, or anything other than the 50 character string. The Court therefore concluded that the internal tracking number in this case falls within this “benign language” exception, and granted CMI’s motion to dismiss.

insideARM Perspective

This case represents a positive “envelope” decision in what has been a busy couple of years for collection letter rulings.


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