Court rulings in the past year are sending conflicting messages about whether a debtor's account number visible on a debt collection envelope violates the Fair Debt Collection Practices Act.
A Pennsylvania federal judge has ruled embedding that number in a bar code is equally problematic given the advent of smartphone bar-code readers.
U.S. District Judge William J. Nealon of the Middle District of Pennsylvania ruled in Kostik v. ARS National Services that the use of a bar code raises the risk that the recipient could be a victim of identity theft. He denied collection agency ARS National's motion for judgment, ruling that the collector violated the FDCPA by including information other than an address on an envelope.
The court cited Douglass v. Convergent Outsourcing, the September 2014 ruling by the Philadelphia-based Third Circuit Court of Appeals. In that case, the court ruled that Convergent violated the FDCPA by sending a letter where the debtor's account number appeared through the envelope's transparent address window. Nealon also cited his own courts July 15 opinion in Styer v. Professional Medical Management, which held that disclosure of a QR code on a debt collection envelope violated the FDCPA. In Kostik v. ARS National, Lisa Kostik filed a complaint on Dec. 1, 2014, regarding a collection letter the agency mailed to her in December 2013. A bar code appeared below the return address in the envelope window, which, when scanned, revealed her account number. ARS argued that the FDCPA "was not intended to prohibit the disclosure of benign symbols on any envelope sent by a debt collector as a means of communicating with a consumer by use of the mails. Nealons ruling, of course, conflicts with the recent decisions by two New York federal judges, who both declined to follow Douglass v. Convergent Outsourcing. Southern District Judge Colleen McMahon ruled, in Perez v. Global Credit and Collection, that a visible eight-digit account number plaintiff Yajaira Perez objected to was "meaningless to anyone other than someone at Global Credit.""Even the fact that it is an account number says nothing about whether the plain white envelope contained a debt collection communication, as opposed to a renewal notice, a special offer to consumer, or any of the other myriad junk mail communications that arrive in plain white envelopes with glassine windows on a daily basis in the mailboxes of America," McMahon wrote.
In Gelinas v. Retrieval-Masters Creditors Bureau, Western District Judge John Curtin ruled that "nothing about the series of letters and numbers above the addressee's name intimates that the contents of the envelope relate to the collection of a delinquent debt, and the visibility of these numbers and letters is neither threatening nor embarrassing."
Markings on the envelope received by consumer Lucienna Gelinas were benign, the court said. An exception that courts have recognized under the FDCPA for benign, unidentifiable markings on creditors' communications should apply, Curtin wrote.