A federal district court in Florida 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 a barcode in which the plaintiff's account number was embedded.

In Martell v. ARS National Services, Inc., the defendant allegedly mailed a collection letter to the plaintiff in an envelope containing a glassine window through which a barcode was visible that the plaintiff claimed was his account number with the defendant. (The defendant averred that the barcode was the internal tracking number assigned by a third-party mail vendor.) 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 observed that courts have recognized a "benign language" exception to Section 1692f(8) for language or symbols on an envelope so long as they do not suggest the letter's purpose of debt collection or the recipient's status as a debtor. Noting that the 11th Circuit had not yet addressed whether Section 1692f(8) contains a benign language exception, the court stated that it was "persuaded by the host of courts finding that the presence of a barcode and its embedded account number on an envelope do not violate the FDCPA." (The court commented that it was also persuaded that the 11th Circuit would adopt the exception, particularly in light of the U.S. Supreme Court's Spokeo decision, which held that a plaintiff must show actual harm from a violation of the Fair Credit Reporting Act to have standing under Article III of the U.S. Constitution to sue for statutory damages in federal court.) In addition to an Eighth Circuit 2004 decision recognizing a benign language exception, the district court cited to several other federal district court decisions that have recognized the exception, including a 2015 New York federal district court decision.

In ruling that the plaintiff had failed to state a FDCPA claim and entering judgment on the pleadings in the defendant’s favor, the district court declined to follow the Third Circuit's 2014 decision in Douglass v. Convergent Outsourcing, which held that the disclosure of a consumer's account number through the transparent window of a debt collector's envelope violated Section 1692f(8). While declining to decide whether Section 1692f(8) contains a benign language exception, the Third Circuit held that, even if such an exception exists, the consumer's account number was not benign because it could be used to identify the plaintiff.

The district court called the Third Circuit’s concern "misplaced" because it was "illogical for the [FDCPA] to be concerned with the eventuality that an enterprising third party would obtain, investigate, and decipher an account number's meaning when simply googling the return address would show that the recipient received a debt collection letter." Instead, the district court found that "an account number embedded in a barcode, as a string of alphanumeric characters, does nothing to implicate or identify plaintiff as a debtor for purposes of Section 1692f(8)."

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. The Group has created a team of lawyers who conduct compliance reviews for debt collectors and debt buyers in anticipation of 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 throughout the country, and its skill in litigation defense and avoidance.

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