In a precedential opinion rendered last week, the U.S. Court of Appeals for the Third Circuit held that the disclosure of a consumer’s account number through the transparent window of a debt collector’s envelope violates Section 1692f(8) of the federal Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692, et seq. In so holding, the Third Circuit initially concluded that information visible through the window of a debt collector’s envelope is covered by Section 1692f(8), and the court then rejected the contention that the account number that could be seen through the window fell within any “benign language” exception to Section 1692f(8).

In Douglas v. Convergent Outsourcing, a debt collector, Convergent Outsourcing (Convergent), mailed a collection letter to the plaintiff in an envelope containing a glassine window through which the plaintiff’s account number with Convergent was visible. On behalf of a putative class, the plaintiff alleged that this disclosure of the account number violated Section 1692f(8), which prohibits “using any language or symbol” other than a debt collector’s name and address on an envelope. The district court granted summary judgment in favor of Convergent, concluding that the account number qualified as “benign language” that Section 1692f(8) was not meant to prohibit.

Reversing the district court, the Third Circuit held as a threshold matter that Section 1692f(8)—which applies to language or symbols “on any envelope”—applies to material appearing through a windowed envelope as well as language printed on the envelope itself. The court then concluded that Section 1692f(8)’s prohibition unequivocally applies to account numbers because the statute plainly states that “any language or symbol,” except the debt collector’s address and, in some cases, business name, may not be included on the envelope. Convergent argued that this interpretation would lead to an absurd result because, read literally, Section 1692f(8) would bar any language other than a debt collector’s name and address, including language such as the name and address of the recipient or even a stamp. Thus, Convergent urged the court to adopt a “benign language” exception to the FDCPA that would allow for markings on an envelope so long as they do not suggest the letter’s purpose of debt collection or humiliate or threaten the debtor.

The Third Circuit declined to decide whether Section 1692f(8) contains a benign language exception because it held that, even if such an exception exists, a consumer’s account number is not benign. Citing Section 1692(a), the court observed that a core concern animating the FDCPA is the invasion of individual privacy. An account number, the court reasoned, raises privacy concerns because it is a core piece of information pertaining to the consumer’s status as a debtor and the debt collection effort. The court rejected Convergent’s contention that the account number was a meaningless string of numbers that could not possibly harm the plaintiff if it were disclosed. The court reasoned that the account number could be used to identify the plaintiff, and to expose to the public her financial predicament.

As part of its analysis, the Third Circuit distinguished decisions by other federal courts—including the Fifth and Eighth Circuits—in which a benign language exception was held to apply. The particular language and markings on the envelopes in those cases, the Third Circuit concluded, did not reveal core information relating to the debt collection effort, or raise privacy concerns, as did the disclosure of the account number. The court likewise distinguished certain Staff Commentary from the Federal Trade Commission that presented examples of “harmless” words or markings, such as a Western Union logo, the label “telegram,” or the words “Personal” or “Confidential.” Unlike an account number, the court concluded, the examples cited in the Staff Commentary did not have the potential to identify the debtor and her debt.

Attorneys in Ballard Spahr’s Consumer Financial Services Group regularly advise clients on compliance with the FDCPA and state debt collection laws, defend clients in FDCPA lawsuits and enforcement matters, and represent clients commenting on regulatory proposals. They are also preparing clients for CFPB examinations. The Group is nationally recognized for its guidance in structuring and documenting new consumer financial services products, its experience with the full range of federal and state consumer credit laws, and its skill in litigation defense and avoidance.

For more information, please contact Practice Leader Alan S. Kaplinsky at 215.864.8544 or kaplinsky@ballardspahr.com, John L. Culhane, Jr., at 215.864.8535 or culhane@ballardspahr.com, Joel E. Tasca at 215.864.8188 or tasca@ballardspahr.com, or Collection Documentation Task Force Chair Christopher J. Willis at 678.420.9436 or willisc@ballardspahr.com.


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