Fair Debt Collection Practices Act
Congress passed the Fair Debt Collection Practices Act (FDCPA) in 1977 to eliminate abusive collection practices by third party debt collectors. The FDCPA spells out prohibited collection practices and behavior, and creates a civil process by which consumers can seek damages and attorneys fees.
3rd Circuit Decision
In August, 2014, the Third Circuit Court of Appeals said that a collection agency violated the Fair Debt Collection Practices Act (FDCPA) when it sent a collection letter with the debtor’s account number visible through the transparent address window of an envelope.See Douglass v. Convergent Outsourcing.
The three-judge appellate panel, in a precedential opinion found “the account number is not meaningless — it is a piece of information capable of identifying Douglass as a debtor.” “The account number is a core piece of information pertaining to Douglass’s status as a debtor and Convergent’s debt collection effort. Disclosed to the public, it could be used to expose her financial predicament. Because Convergent’s disclosure implicates core privacy concerns, it cannot be deemed benign.
Interestingly, the case initially cited the presence of a visible QR Code as a potential violation. The QR Code could also be seen through the window, and when scanned, revealed slightly more information than was visible in print, including the debtor’s account balance. But Douglass no longer pressed the QR Code issue, so the 3rd Circuit panel did not decide whether that was a violation of the FDCPA.
The Court held that the collection agency ran afoul of the FDCPA’s section 1692f(8) by disclosing the debtor’s account number on the glassine window of the envelope.