On September 30, Judge Joan B. Gottschall of the Northern District of Illinois issued a decision stating that the display of a debtor's account number through an envelope window violated the Fair Debt Collection Practices Act.
In Adkins v. Financial Recovery Services, Inc., the plaintiff filed a class action suit in Illinois on behalf of a class of Illinois consumers who received debt collection letters from Financial Recovery Services, among other defendants, that contained personally identifying information that could be seen through the glassine window of an envelope. Financial Recovery Services moved to dismiss the suit as frivolous.
The District Court rejected Financial Recovery Services' motion, ruling that "the disclosure of an account number is a disclosure of a debtor's private information" and a violation of section 1692f(8) of the FDCPA. Judge Gottschall's decision relied heavily on the Third Circuit's 2014 decision in Douglass v. Convergent Outsourcing, 765 F.3d 299, where it held that a debt collector's disclosure of a debtor's reference number through the transparent window of an envelope containing a collection letter violated section 1692f(8).
Interestingly, Judge Gottschall's ruling is directly contrary to the recent rulings of three Judges in the Northern District of Illinois. In Sampson v. MRS BPO, LLC, Civil Action No. 15-cv-2258, 2015 U.S. Dist. LEXIS 32422, 2015 WL 4613067 (N.D. Ill. March 17, 2015) (Shadur, J.); Gonzalez v. FMS, Inc., Civil Action No.14-cv-9424, 2015 WL 4100292, at *6 (N.D. Ill. July 6, 2015) (Castillo, J.); and Schmid v. Transworld Systems, Inc., Civil Action No. 15-cv-2212, 2015 WL 5181922 (N.D. Ill. Sept. 4, 2015) at *5 (Chang, J.), three Illinois District Court Judges issued separate opinions stating that the display of a debtor's account number on a collection envelope did not violate the FDCPA because the disclosures were "benign." Those courts reasoned that if §1692f(8) is read literally to bar any markings on the outside of a debt collection letter envelope other than the names and addresses of the parties, it would lead to absurd results, such as proscribing the use of a stamp on a collection envelope.
Judge Gottschall disagreed. "Unlike Postal Service markings or language such as priority letter," she wrote, "the disclosure of an account number is a disclosure of a debtor's private information. This court cannot find this disclosure so clearly benign that the unequivocal language of the statute should be ignored."
The Troutman Sanders' Consumer Financial Services Law Monitor blog offers timely updates regarding the financial services industry to inform you of recent changes in the law, upcoming regulatory deadlines and significant judicial opinions that may impact your business. To view the blog, click here
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.