A federal court in Pennsylvania has ruled that a debt collector violated the Fair Debt Collection Practices Act (FDCPA) by sending a collection letter in an envelope that allegedly revealed a barcode in which the plaintiff’s account number was embedded.

In Kostik v. ARS National Services, Inc., the plaintiff alleged that the debt collector had mailed a collection letter to her in an envelope containing a glassine window through which the return address and a barcode printed directly below the address were visible. According to the plaintiff, when electronically scanned, the barcode revealed her account number. She claimed that the display of the barcode violated the FDCPA provision that prohibits a debt collector from communicating with a consumer using an envelope on which there is any language or symbol other than the debt collector’s address.

In moving to dismiss the complaint, the debt collector argued that the envelope did not violate the FDCPA because the barcode was a “benign symbol.” It also argued that viewing the account number would require illegal action by a third party since scanning the envelope to obtain the account number would violate federal law.

In refusing to adopt a “benign symbol” exception to the FDCPA, the district court relied on the 2014 decision of the U.S. Court of Appeals for the Third Circuit in Douglass v. Convergent Outsourcing. In Douglass, the Third Circuit ruled that even if such an exception existed, an envelope’s disclosure of a debtor’s account number was not, as the debt collector contended, a “meaningless string of numbers and letters” and therefore “benign” language. Instead, the Third Circuit ruled that the disclosure of the account number was not “benign” and violated the FDCPA because the account number was information capable of identifying the plaintiff as a debtor.

Only a week before deciding Kostik, federal district court Judge William J. Nealon had ruled in Styer v. Professional Medical Management that disclosure of a quick response (QR) code on a debt collection envelope that revealed a consumer’s name, address, and account number when electronically scanned constituted a FDCPA violation. Applying Douglass and his previous decision in Styer, Judge Nealon concluded that the debt collector’s alleged display of the barcode violated the FDCPA and denied the debt collector’s motion to dismiss.

Attorneys in Ballard Spahr’s Consumer Financial Services Group regularly advise clients on compliance with the FDCPA and state debt collection laws and defend clients in FDCPA lawsuits and enforcement matters. To assist clients in responding proactively to the documentation-related challenges being faced by the debt collection industry and creditors attempting to collect their own debts, the Group has formed a Collection Documentation Task Force. Attorneys in the Group also prepare clients for Consumer Financial Protection Bureau examinations.

For more information, please contact Consumer Financial Services Group 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, Collection Documentation Task Force Chair Christopher J. Willis at 678.420.9436 or willisc@ballardspahr.com, Joel E. Tasca at 215.864.8188 or tasca@ballardspahr.com, or Gary W. Becker at 678.420.9464 or beckerg@ballardspahr.com.




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This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.






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