A recent opinion issued by the U.S. District Court for the Southern District of Florida in Michael v. HOVG, LLC (United States District Court, S.D. Florida, Case No. 16-62651) ruled that a plaintiff had standing to allege that collection agency HOVG, LLC violated the Fair Debt Collection Practices Act (FDCPA) and Florida Consumer Collection Practices Act (FCCPA) by displaying “certain language” and a Quick Response (QR) code through the transparent window of an envelope sent to the plaintiff.

A copy of the opinion can be found here.


On August 11, 2016, HOVG sent a collection letter to plaintiff Aviyawna Michael, who filed suit alleging the following:

“Plaintiff claims that due to certain language contained in the Letter and ‘a Quick Response (“QR”) code [displayed] through the transparent window of the envelope,’ Defendant violated the FDCPA and FCCPA.”

HOVG responded to Michael’s suit by filing an instant Motion on December 12, 2016, arguing that the Court “must dismiss the Complaint because Plaintiff lacks standing pursuant to Spokeo, Inc. v. Robins” and/or because “Plaintiff fails to state a claim under the FDCPA and FCCPA.”


Judge Beth Bloom began discussion of the case by first addressing the issue of the plaintiff’s standing to bring the suit pursuant to Spokeo:

“Standing requires that a plaintiff have ‘(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.’ Spokeo, 136 S. Ct. at 1547. ‘To establish injury in fact, a plaintiff must show that he or she suffered ‘an invasion of a legally protected interest’ that is ‘concrete and particularized’ and ‘actual or imminent, not conjectural or hypothetical.’’ Id. at 1548 (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992)). ‘For an injury to be particularized, it must affect the plaintiff in a personal and individual way.’ For the injury to be ‘concrete,’ it must be ‘real,’ and not ‘abstract’; however it need not be ‘tangible.’”

Further, Judge Bloom noted that “in Spokeo the Supreme Court recognized that ‘Congress may ‘elevate to the status of legally cognizable injuries, concrete, de facto injuries that were previously inadequate in law.’”

Citing case law since Spokeo, with particular emphasis on Church v. Accretive Health, Inc, the Court ruled that the plaintiff did have standing in this case.

With respect to the defendant’s argument that Plaintiff failed to state a claim under the FDCPA and FCCPA , Judge Bloom held the following:

  • Plaintiff claimed that the QR barcode’s visibility through the transparent window of the envelope was an FDCPA violation. The Court ruled that “it is irrelevant whether the bar code, when scanned, reveals a scrambled or unscrambled number” and that the plaintiff’s claims survive.
  • Plaintiff also claimed that the defendant violated the FDCPA by “improperly advising Plaintiff that ‘you may incur processing charges when utilizing the online and phone methods of payment’” and for “wrongfully portraying the current creditor’s willingness to settle the Consumer Debt for less than the full amount as having the same net result as paying the full amount of the Consumer Debt,” saying such statements would mislead the least sophisticated consumer. The Court ruled that “the Court finds Plaintiff’s allegations sufficiently non-idiosyncratic to survive dismissal.”
  • Finally, plaintiff claimed that the defendant violated the FCCPA “by attempting to collect an amount from Plaintiff, to wit, a $5.00 convenience fee for payments made over the telephone or via Defendant’s online payment portal, which Defendant was not expressly authorized by contract or statute to collect.” On that point Judge Bloom ruled on that “the Letter does not attempt to collect a $5.00 convenience fee debt” and that claim “fails, and is dismissed with prejudice.”

insideARM Perspective

This result is a negative one for the ARM industry. First, the Spokeo argument failed. Second, this court’s discussion of the issue of the visibility of a QR barcode can be added to the many other “envelope cases” in the past couple of years. insideARM has written about other similar cases on this issue. See the insideARM FDCPA Resources page and the FDCPA Case law grid (updated on a monthly basis thanks to Joann Needleman of the Clark Hill law firm) for links to other cases and insideARM articles about this issue. Finally, the court refused to dismiss claims regarding a potentially misleading letter.

This case illustrates the risk of a having to defend a FDCPA suit if letters contain ANY language beyond what is absolutely required under the FDCPA. Risk/reward analysis should be conducted before adding any new letters to your strategy and system.

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