Today's Trends in Credit Regulation

Federal District Courts Consider Whether Collection Letter Envelopes Violate FDCPA
By Catherine C. Worthington

In September, three federal district court cases determined whether mailing a collection letter that shows a debtor's account number with the debt collector through a glassine window of the envelope violates Section 1692f(8) of the Fair Debt Collection Practices Act. Section 1692f(8) provides that a debt collector may not use unfair or unconscionable means to collect or attempt to collect a debt, including "[u]sing any language or symbol, other than the debt collector's address, on any envelope when communicating with a consumer by use of the mails or by telegram, except that a debt collector may use his business name if such name does not indicate that he is in the debt collection business." The courts came to different conclusions.

On September 4, 2015, in Schmid v. Transworld Systems, Inc., the U.S. District Court for the Northern District of Illinois dismissed the debtor's claim alleging that the debt collector violated the FDCPA by displaying his account number through the transparent window of the collection letter envelope. The court first refused to read the statute literally to prohibit the use of any language other than the debt collector's address on the outside of an envelope. (The court briefly discussed the benign language exception, but did not expressly adopt it.) The court reasoned that such an interpretation would be absurd - debt collectors could not mail anything to debtors because the statute would, under a literal reading, prohibit the debtor's address, as well as postage, on the outside of the envelope. Further, the court explained, the restrictions on envelopes are part of a larger statutory scheme that prohibits unfair or unconscionable meansto collect a debt, which requires a communication. According to the court, a string of letters and numbers is not a means to collect a debt because it does not communicate anything to the debtor. The court reasoned that there is too much attenuation between the account number on the envelope and an actual disclosure of the existence of a debt.

However, a few days later inIn re ACB Receivables Management, the U.S. District Court for the District of New Jersey permitted a similar FDCPA claim to proceed past the motion to dismiss stage. The court relied on the Third Circuit's decision in Douglass v. Convergent Outsourcing, 2014 U.S. App. LEXIS 16628 (3d Cir. (E.D. Pa.) April 8, 2014), which held that the display of an account number on the envelope of a collection letter is an impermissible language or symbol under Section 1692f(8). The Douglass court rejected the argument that an account number is a meaningless string of numbers and letters, as asserted by the debt collector in this case. Because the plaintiffs' account numbers were typed immediately above their names and addresses in a section that was allegedly visible through the windows of the envelopes, the court denied the debt collector's motion to dismiss.

On September 30, another judge in the Northern District of Illinois also concluded that the debtor sufficiently alleged a claim under Section 1692f(8) of the FDCPA by asserting that her account number with the debt collector was visible through the glassine window of the collection envelope. The court disagreed with the debt collector's argument that the account number was simply benign language and, relying on the reasoning in the Douglass decision, found that a debtor's account number is private information that implicates the core privacy concerns underlying the FDCPA's prohibition on extraneous information on envelopes.

Catherine C. Worthington is a managing editor of CARLAW, HouseLaw, and PrivacyLawand is a lawyer in the Maryland office of Hudson Cook, LLP. She can be reached at 410-782-2349 or by email at

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