Complying with the Fair Debt Collection Practices Act
The Third Circuit Court of Appeals 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 and reversed a district court on the issue that “implicates a core concern animating” the FDCPA.
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.
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. 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.
“Section 1692(a) of the FDCPA explains that Congress enacted the law in response to ‘abundant evidence’ of abusive debt collection practices that cause manifest harms to individuals, among them ‘invasions of individual privacy,'” Senior Judge Anthony Scirica said on behalf of the unanimous three-judge panel.
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 U.S. Supreme Court has yet to offer guidance in this area. Until it does so, the best practice for debt collectors in the wake of this Third Circuit decision may be to assume that any language that might identify a letter’s recipient as a debtor, and which is in any way visible to a person handling the mail, violates the FDCPA and should be avoided.
For more information on the case please refer to Douglass v. Convergent Outsourcing