Monday, March 23, 2015

Is Your Envelope “Benign” Under The FDCPA?

            The FDCPA prohibits a collector from placing “any language or symbol” on a debt collection envelope, other than the collector’s address.  That’s right, you read that sentence correctly – absolutely nothing can be safely placed on the envelope, except for the collector’s address.  A collector cannot even put its own name on the envelope, unless the collector is certain the name does not indicate that the company is in the debt collection business. 

            There has been a lot of litigation relating to envelopes recently, but section 1692f(8) of the FDCPA, which regulates collection envelopes, is not new.  It has been a source of frustration for collectors for decades.  Fortunately, some courts have recognized that a strict application of section 1692f(8) may lead to absurd results, and have held that “benign language” on an envelope does not violate the FDCPA.  Not every court has adopted the “benign language” exception to section 1692f(8), however, and it is not always easy to predict what language will fit within the exception.  How do you know if your envelope is “benign” or not?

            Section 1692f(8) of the FDCPA prohibits a collector from using “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.”  15 U.S.C. § 1692f(8).  By its plain language, the only “language or symbol” that can appear on the envelope is the collector’s address.  The collector’s name can only be on the envelope if the name does not indicate the company is in the collection business.  Courts have held that collectors may violate section 1692f(8) simply by placing their own name on the envelope.  See, e.g., Keasey v. Judgment Enforcement Law Firm, PLLC,  2014 WL 1744268, **3-4 (W.D. Mich. Apr. 30, 2014) (section 1692f(8) violated by use of name “Judgment Enforcement Law Firm” on envelope); Rutyna v. Collection Accounts Terminal, Inc., 478 F. Supp. 980, 982 (N.D. Ill. 1979) (envelope stating company name “COLLECTION ACCOUNTS TERMINAL, INC.” violated section 1692f(8): “The purpose of this specific provision is apparently to prevent embarrassment resulting from a conspicuous name on the envelope, indicating that the contents pertain to debt collection.”); but see Simmons v. Med-I-Claims, 2007 WL 486879, *9 ( C.D. Ill. Feb. 9, 2007) (rejecting as “frivolous” plaintiff’s claim that use of name “Med-I-Claims” on envelope violated section 1692f(8)).

            Some courts have recognized that section 1692f(8) was enacted to prevent embarrassment to consumers, and language or symbols that do not disclose the collection purpose of a letter are “benign” and do not violate the statute.  For example, in Strand v. Diversified Collection Servs., Inc., 380 F.3d 316 (8th Cir. 2004), plaintiff argued that defendant’s envelopes violated section 1692f(8) because they “included the terms ‘D.C.S., Inc.’ above the return address, ‘PERSONAL AND CONFIDENTIAL’ in capital boldface type, and ‘IMMEDIATE REPLY REQUESTED’ in capital reverse typeface” along with an image of the company’s logo “depicting a grid with an upward-pointing arrow and the initials ‘DCS.’”  Id. at 317.  The Court stated: “We first observe Ms. Strand invites us to read § 1692f(8) to create bizarre results likely beyond the scope of Congress's intent in enacting the statute.  Under her literal reading of § 1692f(8), a debtor's address and an envelope's pre-printed postage would arguably be prohibited, as would any innocuous mark related to the post, such as ‘overnight mail’ and ‘forwarding and address correction requested.’”  Id. at 318.  The Strand Court relied upon legislative history indicating that section 1692f(8) was designed to prevent disclosure that the letter pertains to debt collection as well as FTC Staff Commentary stating that words like “Personal” or “Confidential” on an envelope would not violate the statute.  Id. at 319.  The Court held, as a matter of law, “the language and symbols were benign because they did not, individually or collectively, reveal the source or purpose of the enclosed letters.”  Id. 

            Consistent with Strand, other courts have recognized the “benign language” exception to section 1692f(8).  See, e.g., Goswami v. American Collections Enter., Inc., 377 F.3d 488, 492 (5th Cir. 2004) (envelope with half-inch thick blue bar across front and words “Priority Letter” in white did not violate section 1692f(8), because subsection “only prohibits markings on the outside of envelopes that are unfair or unconscionable, such as markings that would signal that it is a debt collection letter and tend to humiliate, threaten, or manipulate debtors.”); Johnson v. NCB Collection Servs., 799 F. Supp. 1298, 1305 (D. Conn. 1992) (no violation to use terms “Revenue Department” and “Personal and Confidential” on envelope: “Nothing in the innocuous designation of ‘Revenue Department’ distinguishes the letter from other permissible forms of correspondence such as direct billings from creditors for debts not yet past due. The mere use of the departmental designation ‘Revenue Department’ in the return address of a collection notice is simply not the type of abusive collection practice that the FDCPA was intended to reach.”); Lindbergh v. Transworld Sys., Inc., 846 F. Supp. 175, 180 (D. Conn. 1994) (envelope with symbol comprised of blue stripe and the word “TRANSMITTAL” did not violate section 1692f(8), because symbol did not pertain “to debt collection in any way” and the “mechanical interpretation of section 1692f(8)” would not comport with the structure or purpose of the FDCPA); Masuda v. Thomas Richards & Co., 759 F. Supp. 1456, 1466 (C.D. Cal. 1991) (envelope containing notice that theft of mail or obstruction of delivery is federal crime, as well as words “PERSONAL & CONFIDENTIAL” and “Forwarding and Address Correction Requested” did not violate section 1692f(8): “Congress' interest in protecting consumers, however, would not be promoted by proscribing benign language.”).

            It is risky to rely on the “benign language” exception.  Many courts have never formally recognized the exception, or have held that the words or symbols used by the collector did not fall within it.  For example, in Douglass v. Convergent Outsourcing, 765 F.3d 299 (3d Cir. 2014), the Court held the collector violated section 1692f(8), because the debtor’s account number was visible through the window of the envelope.  The Court declined to adopt the “benign language” exception, noting that the language of section 1692f(8) was “unequivocal.”  Id. at 303.  Even if a “benign language” exception existed, however, the Court held disclosure of the account number was not benign, because it “implicates a core concern animating the FDCPA – the invasion of privacy.”  Id.  The Douglass Court summarized:  “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.”  Id. at 303-04; see also Peter v. GC Servs. L.P., 310 F.3d 344, 352 (5th Cir. 2002) (envelope containing words “US Department of Education. . . . Official Business.  Penalty for Private Use $300" violated section 1692f(8):  “We do not need to reach the issue of whether § 1692f(8) implicitly includes an exemption for benign language, since the Defendants' impersonation of the Department of Education is certainly not benign.”); Kryluk v. Northland Group, Inc., 2014 WL 6676728, *11 (E.D. Pa. Nov. 21, 2014) (granting consumer leave to amend complaint to add section 1692f(8) claim where account number was visible through envelope’s window); Voris v. Resurgent Capital Servs., LP, 494 F. Supp. 2d 1156 (S.D. Cal. 2007) (envelope with words “return service requested” and “You are Pre-approved* See conditions inside” may violate section 1692f(8) by causing debtor to discard envelope without reading section 1692g notice inside:  “[I]f printed language on an envelope causes a debtor damage, loss of rights, or other harm, the language is not benign.”).

            Have you looked closely at your collection envelopes lately?  Given the renewed focus on section 1692f(8) claims, now is probably a good time to ensure that your envelopes do not have any language or symbol on them that may run afoul of the Act. 


  1. Good post. I wonder when the decision will come down finding a trade name can be Googled to infer a plausible connection to debt collection, and holding a violation of the envelope rule.

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