District Court Immediately Kicks Out FDCPA Suit Over Account Number on Envelope

On its own initiative, the court dismissed the case after finding the initial complaint was a “bad joke” because the FDCPA claims for revealing the account number on the envelope are “absurd.”

On March 17, an Illinois federal court sua sponte (Latin phrase translating to “of its own accord”) dismissed a Fair Debt Collection Practices Act (FDCPA) case that involved a consumer’s collection account number being visible on an envelope containing a debt collection letter. The dismissal occurred just one day after the complaint was filed and even before the collection agency asserted any defense. 

In doing so, the court held that simply placing an undecipherable sequence of numbers and symbols on the outside of an envelope when communicating with a consumer cannot constitute the sort of abusive debt collection practice proscribed by the FDCPA. The mere presence of such internal tracking numbers, markings or codes on such an envelope cannot serve as a legitimate basis for an FDCPA action. 

In the case, Sampson v. MRS BPO, LLC, No. 15-C-2258, 2015 WL ----- (N.D.Ill., March 17, 2015), the consumer filed an FDCPA lawsuit in in the Northern District of Illinois accusing the debt collection agency of using “unfair and unconscionable” debt collection practices and engaging in harassing, oppressive and abusive conduct in connection with the collection of a debt. The consumer, in the FDCPA lawsuit filed on March 16, 2015, alleged that the collection agency violated the law when it sent her a debt collection letter (dated March 2, 1015) in an envelope on which her collection account number for the alleged debt was visible to anyone in the public who might view the envelope. 

As soon as the consumer’s complaint was filed against the collection agency, the district court took one quick look and determined that the “Complaint is a bad joke—a joke because the claims are so patently absurd, and a bad one because $400 has been wasted on a filing fee.” 

The court reasoned that any member of the public who might see the allegedly offending envelope would need X-ray vision or supernatural powers to be able to know that the letter in the envelope was related to collecting a debt. The court went on to note that the collection agency did not commit any “statutory sins” when it placed the consumer’s collection account number on the outside of the envelope when communicating with her, however the consumer’s lawyer may have when it filed the complaint. As such, the consumer’s attorney is ordered to appear in court on March 30, 2015 and explain why his conduct is not sanctionable under Rule 11 of the Federal Rules of Civil Procedure. 

Practical Considerations:

Notwithstanding this favorable decision, ACA International members engaged in collection activity in the Northern District of Illinois should not assume that the inclusion of an account number on a collection envelope, by itself, is not a violation of the FDCPA. While ACA International is encouraged by this recent decision, as a reminder to our members, it is only binding on the parties to this specific case. However, other courts may consider this decision when analyzing similar issues. It remains to be seen whether judges will rule in a similar manner in this jurisdiction or others.

ACA International is aware of the Douglass v. Convergent Outsourcing, 765 F.3d 299 (3d Cir. 2014) decision, in which the court found that an account number showing through the window of a collection envelope does violate the FDCPA. This opinion still controls in the Third Circuit (which includes Pennsylvania, New Jersey and Delaware.) ACA members engaged in collection activities in the Third Circuit should still assume that any language that might identify a recipient of a letter as a consumer debtor (including account numbers) and is in any way visible to a person handling the mail violates the FDCPA and should be avoided.

Due to differing decisions among the courts, ACA members engaged in collection activities outside the Third Circuit should consult with legal counsel to determine the best course of action because it is uncertain how courts in other jurisdictions will rule on similar claims.

ACA International will continue to monitor court decisions on this issue and will keep members posted on any new developments.