New Case Impacts Use of "Benign" Language

New Case Impacts Use of "Benign" Language

There are various statements by the court in the case of Douglass v. Convergent Outsourcing that agencies should make sure to understand and apply to their notices. 2014 WL 4235570 (3rd Cir. 2014). Of note, the Third Circuit Court of Appeals sets precedent for the federal district courts in Delaware, New Jersey, and Pennsylvania. Despite the limited geographical scope of the opinion, the outcome will generate additional litigation on this issue. Consumer attorneys will actively advance any new theory against the collection industry. The account number at issue in this case was the account number of the collection agency rather than the account number of the original creditor, but this does not appear to be an overly important distinction because practically, there should be no reason for an agency to put the original creditor account number in an envelope window. If an agency is using the same account number as the original creditor, the agency's use of the creditor account number falls squarely within the facts of this case.

Despite the language at issue being visible through the window rather than on the envelope, the court holds "§ 1692f(8) applies to language visible through a transparent window of an envelope." Id. at *3. There are prior cases on this issue that held certain language on an envelope to be "benign" and therefore not in violation of the FDCPA. In the cases supporting "benign" language the information on the envelope "revealed no information about the debtor" (for example "personal & confidential"). Id. at *5. In this case the court states that the account number "is not meaningless - it is a piece of information capable of identifying Douglass as a debtor." Id. at *6.

The court in Douglass believes the account number is a core piece of information related to the consumer's status as a debtor and the agency's debt collection effort. Id. at *4. If the number is disclosed to the public, it may expose the consumer's financial situation. Id. The potential exposure is the essence of the problem and distinguishes this case from the line of cases where "benign" language was on an envelope.

In light of this case, agencies should carefully review any and all information that is on a collection notice envelope or that will appear through the envelope's window with a qualified attorney. The review should include words, letter sequences, number sequences, symbols, bar codes, and any other printed item. Consumer attorneys will consistently argue that any debtor related information is problematic. Agencies may continue to argue that certain statements, numbers, language, or symbols are benign, but it is important to understand that agencies are left arguing the exception to the rule, and the exception is narrowed by the Douglass opinion.

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