Based on an August 28, 2014 decision of the U.S. Court of Appeals for the Third Circuit, in Douglass v. Convergent Outsourcing f/k/a ER Solutions, Inc., 765 F.3d 299 (3d Cir. 2014), debt collectors may need to be a lot more careful about the manner in which they send correspondence to debtors, particularly as to their use of envelopes with glassine (i.e., “see-through”) windows.

The facts in Douglass were that Courtney Douglass received a debt collection letter from Convergent Outsourcing (“Convergent”) regarding a debt that she owed to T-Mobile USA. Printed near the top of the letter, above her name and address, was Douglass’ account number with Convergent: “R-xxxx-5459-R241.” The letter  was mailed to her in an envelope with a glassine window. When mailed, the top portion of the letter, including Douglass’ name and address, the account number, a U.S. Postal Service bar code and a quick response (“QR”) Code, were visible through the window. The QR Code, if scanned by a device such as a smartphone, would reveal the same information that was visible through the glassine window plus a monetary amount that corresponded to Douglass’ debt.

Douglass initiated a putative class action lawsuit against Convergent on behalf of herself and all other residents of Montgomery County, Pennsylvania who received similar letters from Convergent exposing their account numbers. She alleged that Convergent violated the Fair Debt Collections Practices Act (“FDCPA”), 15 U.S.C. § 1692f(8), which prohibits a debt collector from “using any language or symbol” other than the debt collector’s name and address on an envelope, by disclosing her account number, both through  the glassine window and embedded in the QR Code. (She later dropped her claim concerning the QR Code.)

District Court Decision

The district court granted summary judgment in favor of Convergent, reasoning that a strict interpretation of § 1692f(8) would contradict Congress’ intent. That intent, the court said, was only to prohibit language or symbols on an envelope that would signal the letter’s purpose as debt collection or that would “tend to humiliate, threaten, or manipulate the recipient of the letter.” Other language or symbols, referred to as “benign language,” the court held, was not prohibited.

Based on this reasoning, the district court concluded that the account number qualified as “benign language” because “it neither indicated the purpose of the letter nor threatened, harassed, or manipulated Douglass.” Douglass appealed.

Decision on Appeal

The Third Circuit reversed the district court’s decision, and remanded the case for further proceedings. Its reasons for doing so are set forth below.

First, although neither party apparently argued the point, the court noted that § 1692f(8) regulates language “on any envelope,” and construed those words to mean “language appearing on the face  of an envelope.” Hence, the fact that the account number was printed on the letter and only visible through the window made no difference in the court’s view.

Second, the court observed that § 1692f(8)  is, by its terms, unequivocal. In this regard, the court noted that the plain language of § 1692f(8) prohibits the use by a debt collector of “any language or symbol, other than the debt collector’s address [and name, provided it does not indicate that the collector is in the debt collection business], on any envelope when communicating with a consumer by use of the mails or by telegram…,” and thus “does not permit Convergent’s envelope to display an account number.”

Nevertheless, the court declined to determine whether or not the statute allows for a “benign language” exception.  It did so based on the fact that, as Convergent pointed out, if § 1692f(8) is read literally, it would prohibit a debt collector from ever sending a letter through the mail, since displaying the recipient’s name and address or affixing a stamp on the envelope would not be permitted – clearly, an absurd result.

Rather than deciding whether a benign language exception is appropriate, the court decided instead that any such exception could not be “stretched to cover” conduct implicating a “core concern of the FDCPA,” which the court found would be the case if the debtor’s account number were to be included in the exception. One of these “core concerns” is the “invasion of privacy.” (The FDCPA, 15 U.S.C. § 1692(a), explains that Congress enacted the law in response to “abundant evidence” of abusive debt collection practices that cause manifest harm to individuals, and among such harm, is “invasions of privacy.”)

The court contrasted account numbers with other markings on envelopes that have been found by other courts and by the Federal Trade Commission in its FDCPA commentary to be benign, including “priority letter,” “PERSONAL AND CONFIDENTIAL,” “IMMEDIATE REPLY REQUESTED,” “Revenue Department” and “Forwarding and Address Correction Requested.” These markings, in the court’s view, “do not raise the privacy concerns present in this case.”

The court viewed Douglass’ account number, contrary to Convergent’s characterization of it as a meaningless string of numbers and letters that could not possibly harm Douglass, as “a piece of information capable of identifying Douglass as a debtor.” Hence, its disclosure on the envelope sent by Convergent was deemed by the court to violate the FDCPA, 15 U.S.C. § § 1692f(8), regardless whether or not that section should be interpreted to include a “benign language exception.”

The lesson here for debt collectors is to be very careful as to how debt collection letters are sent. If envelopes with glassine windows are used, they should ensure that the only information visible through the window is the debtor’s name and address.