Industry Gets Favorable Ruling in Debt Collection Envelope Case

In a new decision filed on Wednesday, the US District Court for the Eastern District of Pennsylvania ruled in favor of the defendant in a Fair Debt Collection Practices Act (FDCPA) case involving the defendant sending a letter with a visible barcode on it. The case, Anenkova v. Van Ru Credit Corporation, is a positive ruling for the defendant agency in the ongoing debate over what information can be displayed on the outside of an envelope mailed by a collector to a consumer.

The main issue in this case, according to the court, is “whether the barcode visible through a glassine window of an envelope is benign” or a violation of the FDCPA’s prohibition on using “any language or symbol, other than the debt collector’s address, on any envelope when communicating with a consumer.”

The issue in this case arose when the Van Ru Credit Corporation, through a vendor, sent a letter to Lyudmilla Anenkova about her credit card debt which included a barcode that was visible through the envelope’s window. The barcode, when scanned, reveals a series of identifiers used by the vendor, but none of Anenkova’s personal information. Despite this, Anenkova sued, claiming that the barcode’s visibility was an instance of Van Ru using “unlawful tactics to collect a debt in violation of the FDCPA.”

Given the facts in this case, the District Court ruled that there is a benign language exception, since the barcode did not include Anenkova’s personal information. In the court’s opinion granting summary judgment to the defendant, Judge Timothy J. Savage writes that the “barcode on Anenkova’s letter was not a core piece of information related to her status as a debtor” and “served a legitimate purpose,” therefore “it was benign.”

insideARM Perspective

While this decision is positive for the industry, it’s impossible to determine a clear answer to the challenge of what agencies can include on letters and envelopes. Given the split of opinion among various courts on this issue, it seems that the safest route is to refrain from including any symbols on an envelope or in a letter that can be seen through the envelope’s window. For instance, the Middle District of Pennsylvania ruled in favor of the plantiff in May’s Daubert v. NRA Group case, because the barcode in question there revealed the plantiff’s account number when scanned.

You should also make sure you’re familiar with the CFPB’s Outline of Proposed Rules for third-party debt collectors and debt buyers. Some aspects of the proposals are relevant to this specific issue, and communication practices in general.

_____________________________________

Read insideARM’s detailed coverage of the CFPB’s Outline of Proposed Rules

insideARM Perspective on CFPB Outline of Proposed Debt Collection Rules – Communication Part 1 (Contact frequency and voicemail messages)

insideARM Perspective on CFPB Outline of Proposed Debt Collection Rules – Communication Part 2 (General time, place, and manner restrictions; decedent debt; and consumer consent)

insideARM Perspective on CFPB Outline of Proposed Debt Collection Rules – Information Integrity (Data integrity, data transfer, substantiation, validation notice)

insideARM Perspective on CFPB Outline of Proposed Debt Collection Rules – Litigation and Time-Barred Disclosures

What Collectors Really Need to Know About the CFPB’s Proposed Rules - a podcast by Attorney John Rossman

15 Industry Experts React to CFPB Outline of Proposed Debt Collection Rules

Webinar: CFPB Rulemaking and Overview (August 18) – free for Compliance Professionals Forum members; $59 for others