A federal district court in New York has ruled that a debt collector did not violate the Fair Debt Collection Practices Act (FDCPA) by sending a collection letter in an envelope that allegedly revealed an internal tracking number assigned to the plaintiff’s account.

In Gardner v. Credit Management LP, the plaintiff alleged that the debt collector had mailed a collection letter to her in an envelope containing a glassine window through which her name, address, and a string of 50 alphanumeric characters were visible. The string of characters was alleged to contain a nine-digit internal tracking number assigned by the debt collector to the plaintiff’s account. She claimed that the display of the tracking number 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 or name.

In granting the debt collector’s motion for judgment on the pleadings, the Court refused to read the FDCPA prohibition literally, commenting that to do so would lead to “absurd results.” Based on its review of the FDCPA’s legislative history, the Federal Trade Commission’s (FTC) FCRA Commentary, and “the consensus (though not unanimity) developed among numerous other courts that have considered the issue directly,” the Court found that a “benign language” exception applies to the prohibition. According to the Court, the FDCPA’s legislative history suggested that the prohibition was intended to protect consumers from “collection agencies’ targeted disclosures of a recipient’s indebtedness as a means of harassment and embarrassment.”

It also noted that the FTC, under the heading “harmless words or symbols,” had stated in its FDCPA Commentary that a debt collector does not violate the FDCPA by using an envelope printed with words or notations that do not suggest the mailing’s purpose. According to the Court, this statement indicated that the FTC contemplated a “harmless words or symbols” exception to the FDCPA’s prohibition.

In finding that the envelope’s display of the tracking number fell within the “benign language” exception, the Court observed that the tracking number “does not appear in a format that would signify to anyone outside of [the debt collector] that it pertains to a debt. The number looks no different from any of the other seemingly arbitrary assemblages of numbers appearing on countless letters sent by banks, advertisers, and other corporate entities each day. On its face, the number betokens nothing.” (It also observed that it would be unclear to someone unfamiliar with the debt collector’s internal reference system which of the numbers even constituted the tracking number.)

The Court also commented that “a sufficiently curious party” could determine that someone had received a debt collection letter by entering a debt collector’s return address, which the FDCPA allows to be displayed, into an Internet search engine. In the Court’s view, the FDCPA would not permit a collector's return address or name (provided it does not reveal the sender is in the debt collection business) to be shown if the FDCPA “were concerned with the display of information that could, if diligently investigated, disclose a recipient’s debtor status.” (emphasis included).

In addition, the Court cited decisions by two other New York federal district courts that have held that a visible tracking number falls within the “benign language” exception.

The Court also observed that it was not bound by the Third Circuit’s 2014 decision in Douglass v. Convergent Outsourcing, which held that an envelope’s disclosure of a debtor’s account number violated the FDCPA because it was information capable of identifying the plaintiff as a debtor. (Two post-Douglass Pennsylvania federal district court decisions have held that it is a FDCPA violation for a debt collector to use an envelope that displays a quick response (QR) code which, when scanned, reveals a consumer’s name, address, and account number, or a barcode in which the plaintiff’s account number is embedded).

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, Collection Documentation Task Force Chair Christopher J. Willis, John L. Culhane, Jr., Gary W. Becker, or Marjorie J. Peerce.


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