Envelope Window FDCPA Case Denied Rehearing by Circuit Court

The Third Circuit Court of Appeals Monday denied a petition to rehear an FDCPA case that involved an account number being visible through the clear window of an envelope containing a debt collection letter.

ACA International had the first news of the rejection. The trade group said that the defendant in Douglass v. Convergent Outsourcing had its petition denied without comment.

Two weeks ago, Convergent filed its petition after the Third Circuit unanimously overturned a district court ruling in the firm’s favor. The collection agency filed its petition for rehearing en banc (before all judges in the circuit) or by another three-judge panel.

Convergent sent a collection letter for a past due mobile phone bill with the debtor’s account number – a number used internally, which the defendant referred to as a tracking number — visible through the transparent address window of an envelope. Convergent had previously won a summary judgment in the Eastern District of Pennsylvania ruling that the account number was “benign language.”

But the Third Circuit panel disagreed, writing, “The account number is a core piece of information pertaining to Douglass’s status as a debtor and Convergent’s debt collection effort.  Disclosed to the public, it could be used to expose her financial predicament.  Because Convergent’s disclosure implicates core privacy concerns, it cannot be deemed benign.”

The panel overturned the district court’s decision and ruled that the disclosure did violate the FDCPA.

In its rehearing petition, Convergent argued that the Third Circuit panel erred in concluding that the tracking number could have disclosed that the letter was pertaining to debt collection. The company wrote, “every shred of evidence presented to the District Court revealed that the number was innocuous, Douglass was not harmed by the disclosure of the sequence of letters and numbers, and neither Douglass nor her ’expert’ could provide any manner in which Douglass could be harmed by such disclosure.”

In discussing next steps, ACA noted that Convergent can either appeal the case to the Supreme Court or focus on another trial at the district court level to determine what, if any, damages should be paid to Douglass.

ACA points out that even if Convergent gets a positive outcome – a zero-damages verdict – the Circuit decision finding the tracking number a disclosure violation would remain as a precedent in the Third Circuit.