Is Your Envelope “Benign” Under The FDCPA?

Tomio Narita

The FDCPA prohibits a collector from placing “any language or symbol” on a debt collection envelope, other than the collector’s address.  That’s right, you read that sentence correctly – absolutely nothing can be safely placed on the envelope, except for the collector’s address.  A collector cannot even put its own name on the envelope, unless the collector is certain the name does not indicate that the company is in the debt collection business.

Courts have held that collectors may violate section 1692f(8) simply by placing their own name on the envelope:

• Keasey v. Judgment Enforcement Law Firm, PLLC,  2014 WL 1744268, **3-4 (W.D. Mich. Apr. 30, 2014) (section 1692f(8) violated by use of name “Judgment Enforcement Law Firm” on envelope)

• Rutyna v. Collection Accounts Terminal, Inc., 478 F. Supp. 980, 982 (N.D. Ill. 1979) (envelope stating company name “COLLECTION ACCOUNTS TERMINAL, INC.” violated section 1692f(8): “The purpose of this specific provision is apparently to prevent embarrassment resulting from a conspicuous name on the envelope, indicating that the contents pertain to debt collection.”)

• Simmons v. Med-I-Claims, 2007 WL 486879, *9 ( C.D. Ill. Feb. 9, 2007) (rejecting as “frivolous” plaintiff’s claim that use of name “Med-I-Claims” on envelope violated section 1692f(8)).

There has been a lot of litigation relating to envelopes recently, but section 1692f(8) of the FDCPA, which regulates collection envelopes, is not new.  It has been a source of frustration for collectors for decades.  Fortunately, some courts have recognized that a strict application of section 1692f(8) may lead to absurd results, and have held that “benign language” on an envelope does not violate the FDCPA.

Some courts have recognized that section 1692f(8) was enacted to prevent embarrassment to consumers, and language or symbols that do not disclose the collection purpose of a letter are “benign” and do not violate the statute.  For example, in Strand v. Diversified Collection Servs., Inc., the Strand Court relied upon legislative history indicating that section 1692f(8) was designed to prevent disclosure that the letter pertains to debt collection, as well as FTC Staff Commentary stating that words like “Personal” or “Confidential” on an envelope would not violate the statute.  The Court held, as a matter of law, “the language and symbols were benign because they did not, individually or collectively, reveal the source or purpose of the enclosed letters.”  

Consistent with Strand, other courts have recognized the “benign language” exception to section 1692f(8):  

• Goswami v. American Collections Enter., Inc., 377 F.3d 488, 492 (5th Cir. 2004) (envelope with half-inch thick blue bar across front and words “Priority Letter” in white did not violate section 1692f(8), because subsection “only prohibits markings on the outside of envelopes that are unfair or unconscionable, such as markings that would signal that it is a debt collection letter and tend to humiliate, threaten, or manipulate debtors.”) 

• Johnson v. NCB Collection Servs., 799 F. Supp. 1298, 1305 (D. Conn. 1992) (no violation to use terms “Revenue Department” and “Personal and Confidential” on envelope: “Nothing in the innocuous designation of ‘Revenue Department’ distinguishes the letter from other permissible forms of correspondence such as direct billings from creditors for debts not yet past due. The mere use of the departmental designation ‘Revenue Department’ in the return address of a collection notice is simply not the type of abusive collection practice that the FDCPA was intended to reach.”) 

• Lindbergh v. Transworld Sys., Inc., 846 F. Supp. 175, 180 (D. Conn. 1994) (envelope with symbol comprised of blue stripe and the word “TRANSMITTAL” did not violate section 1692f(8), because symbol did not pertain “to debt collection in any way” and the “mechanical interpretation of section 1692f(8)” would not comport with the structure or purpose of the FDCPA) 

• Masuda v. Thomas Richards & Co., 759 F. Supp. 1456, 1466 (C.D. Cal. 1991) (envelope containing notice that theft of mail or obstruction of delivery is federal crime, as well as words “PERSONAL & CONFIDENTIAL” and “Forwarding and Address Correction Requested” did not violate section 1692f(8): “Congress’ interest in protecting consumers, however, would not be promoted by proscribing benign language.”). 

Not every court has adopted the “benign language” exception to section 1692f(8), however, and it is not always easy to predict what language will fit within the exception.  How do you know if your envelope is “benign” or not?

For example, in Douglass v. Convergent Outsourcing, 765 F.3d 299 (3d Cir. 2014), the Court held the collector violated section 1692f(8), because the debtor’s account number was visible through the window of the envelope.  The Court declined to adopt the “benign language” exception, noting that the language of section 1692f(8) was “unequivocal.”  Even if a “benign language” exception existed, however, the Court held disclosure of the account number was not benign, because it “implicates a core concern animating the FDCPA – the invasion of privacy.”  The Douglass Court summarized:  “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.” 

Have you looked closely at your collection envelopes lately?  Given the renewed focus on section 1692f(8) claims, now is probably a good time to ensure that your envelopes do not have any language or symbol on them that may run afoul of the Act.