Monday, September 8, 2014

FYI: 3rd Cir Holds Account Number Visible Through Transparent Address Window on Letter Violates FDCPA

The U.S. Court of Appeals for the Third Circuit recently vacated and remanded the district court’s order granting summary judgment in favor of a debt collector on a debtor’s claim that the disclosure of the debtor’s account number on the face of the debt collector’s envelope violated § 1962f(8) of the federal Fair Debt Collection Practices Act (“FDCPA”). 


Refusing to offer an opinion as to whether § 1962f(8) contains an exception for “benign language,” the Third Circuit ruled that any markings on a debt collector’s envelope that can identify the debtor and his or her status as a debtor are not benign and violate the statute’s prohibitions as a matter of law. 


The Third Circuit also held that § 1962f(8) is not limited to markings printed on the envelope itself, and that the statute can be violated by markings visible through the transparent window of an envelope.


A copy of this opinion is available at:


In this putative class action lawsuit, the sole representative plaintiff debtor alleged that the defendant debt collector, while attempting to collect a debt on behalf of a third party, violated section 1692f(8) of the FDCPA when it issued correspondence to the debtor in an envelope upon the face of which the debtor’s account number was visible.


As you may recall, 1962f(8) of the FDCPA contains a prohibition on “using any language or symbol, other than the debt collector’s address, on any envelope when communicating with a consumer by use of the mails … except that a debt collector may use his business name if such name does not indicate that he is in the debt collection business.”  15 U.S.C. § 1962f(8).


Here, the debtor was contacted by the debt collector via the mail.  The debt collector’s letter was sent in an envelope that contained a transparent address window.  Through the window, the debtor’s account number with the debt collector (not the wireless telecom provider) was visible, as was a “QR Code” that, when scanned with the appropriate device, revealed the monetary amount corresponding to the debt owed. The subject litigation ensued thereafter, and was ultimately amended to initiate a class action on behalf of similarly situated debtors in Montgomery County, Pennsylvania.


The district court granted summary judgment in favor of the debt collector, reasoning that a strict interpretation of the FDCPA on this point of law would contradict the intent of § 1962f(8), which was to bar markings on an envelope that could lead to the humiliation or harassment of the debtor.  In doing so, the district court adopted a “benign language” exception to the prohibitions of § 1962f(8), limiting the statute to prohibiting “language or symbols that either (1) signal the letter’s purpose of debt collection or (2) tend to humiliate, threaten, or manipulate the recipient of the letter.”


On appeal, the debtor contended that the language of § 1962f(8) is clear, unambiguous and applies to the disclosure of the debtor’s account number on the face of the envelope.  In response, the debt collector asserted that enforcing the plain meaning of the statute would lead to an absurd result, and that the debtor’s account number, as “benign language,” should be exempted from the prohibitions of § 1962f(8).  The debtor countered that even if there was an exception for benign language, the debtor’s account number is not benign.  Notably, on appeal, the debtor appeared to have abandoned the argument that the debt collector’s inclusion of a visible “QR Code” also violated the FDCPA.


In its opinion vacating and remanding the district court's grant of summary judgment in favor of the debt collector, the Third Circuit held that “§ 1962f(8)’s prohibition on language and symbols applies to markings that are visible through a transparent window of an envelope.  Strictly speaking, section § 1962f(8) applies to language “on any envelope.”  15 U.S.C. § 1962f(8) (emphasis added).


However, given Congress’s intent when enacting the FDCPA was to screen information from public view that is relevant to debt collection, the Third Circuit extended the reach of the statute to include information visible through a transparent window of a debt collector’s envelope.


In addition, the Third Circuit noted that the language of § 1962f(8) is unequivocal and plainly prohibits the display of an account number.  In so far as the language of the statute is plain, the Third Circuit is bound “to enforce it according to its terms [so long as] the disposition required by that text is not absurd.” Alston v. Countrywide Fin. Corp., 585 F.3d 753, 759 (3rd Cir. 2009).  Therefore, unless the literal application of the statute’s text results in an absurd result, the plain language of the statute must be enforced.


The debt collector asserted that the Third Circuit was required to adopt and apply a “benign language” exception that would allow “markings on an envelope so long as they do not suggest the letter’s purpose of debt collection or humiliate or threaten the debtor.”  Such an exception appears to have been accepted in the Fifth and Eight Circuits, but not yet in the Third Circuit.  See e.g., Goswami v. American Collections Enterprise, Inc., 377 F.3d 488 (5th Cir. 2004); Strand v. Diversified Collection Service, Inc., 380 F.3d 316 (8th Cir. 2004).


The Third Circuit declined to decide whether § 1962f(8) contains a “benign language” exception.  However, the Third Circuit held that a debtor’s account number is not benign, such an exception, even if it exists at all, would not apply here. 


Simply stated, the Third Circuit felt that the disclosure of the debtor’s account number “implicat[ed] a core concern animating the FDCPA – the invasion of privacy.”  Rather than, as the debt collector argued, being just a “meaningless string of numbers and letters that could not possibly hurt [debtor],” the Third Circuit held that the debtor’s account number is a “piece of information capable of [publically] identifying [the debtor] as a debtor,” and that the disclosure of same has the potential to cause the very harm that the FDCPA was enacted to prevent.


Accordingly, the Third Circuit vacated the summary judgment ruling in favor of the debt collector, and remanded for further proceedings consistent with the opinion.






Ralph T. Wutscher
McGinnis Wutscher Beiramee LLP
The Loop Center Building
105 W. Madison Street, 18th Floor
Chicago, Illinois 60602
(312) 551-9320
(312) 284-4751
(312) 493-0874


Admitted to practice law in Illinois



          McGinnis Wutscher Beiramee LLP





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