Collection Agency Wants Court to Look Again at FDCPA Case

Collection agency Convergent Outsourcing filed a petition on Wednesday asking the Third Circuit Court of Appeals to revisit a recent appellate decision in Douglass v. Convergent Outsourcing.

A three-judge appellate panel ruled two weeks ago that Convergent Outsourcing violated the Fair Debt Collection Practices Act by sending a collection letter that revealed the debtor's account number through the envelope's transparent address window. The case is thought to be the first involving FDCPA violations stemming from the use of modern technology generating an internal tracking number.

The FDCPA prohibits anything other than the collection agency's address appearing on an envelope that carries a collection letter. In this case, the account number was not on the envelope, but the location on the actual letter made it visible.

The appellate panel rejected Convergent Outsourcing's argument that the account number is meaningless, and instead ruled it is information that possibly could identify the debtor. Convergent Outsourcing, formerly ER Solutions, sent the letter in 2011 to collect plaintiff Courtney Douglass, who allegedly owed the debt to T-Mobile.

Convergent Outsourcing, in the petition, argues that the case concerns a critical issue for the estimated $55 billion collection industry and how collection agencies send collection letters to consumers. The company asserts that the Third Circuit panel erred in the ruling and that "every shred of evidence presented to the district court revealed that the number was innocuous."

Both the Fifth Circuit and Eighth Circuit previously have read the FDCPA language to allow an exception for benign markings on an envelope - including "priority letter" and "Personal and Confidential" but those markings did not come with "the potential to cause invasions of privacy," Senior Judge Anthony Scirica ruled in the appellate decision.

"Disclosed to the public, [the account number] could be used to expose her financial predicament. Because Convergent's disclosure implicates core privacy concerns, it cannot be deemed benign," Scirica ruled.

In the petition, Convergent Outsourcing states "this issue was resolved in favor of Convergent before the district court based upon the irrefutable (in fact, factually uncontested) evidence that Douglass had not been harmed, that the jumble of letters and numbers in question was undecipherable to anyone other than Convergent and that neither [the] plaintiff nor her 'expert' was able to articulate any manner in which Douglass could have been harmed."

It was not immediately clear when or if the appellate court will take another look at the case. Convergent Outsourcing is a member of ACA International, the largest association representing collection agencies.