Pennsylvania District Court Applies Benign Language Exception to Barcode

A Pennsylvania district court has recognized that a benign language exception exists under 15 U.S.C. 1692f(8) and may be applied to barcodes under appropriate circumstances.  Anenkova v. Van Ru Credit Corp., C.A. No. 15-4968 , 2016 U.S. Dist. LEXIS 108950(E.D. Pa. Aug. 17, 2016).  The court’s decision signals a welcome step back from other district courts’ expansion of the Third Circuit’s decision in Douglass v. Convergent Outsourcing, 765 F.3d 299 (3^rd Cir. 2014).  In Douglass, the Third Circuit held, without deciding if a benign language exception existed to 15 U.S.C. § 1692f(8), that an account number capable of revealing that a recipient was a debtor was a violation within the scope of the plain language of the Fair Debt Collection Practices Act.

In Anenkova, the debt collector used a letter vendor to send a debt collection letter.  A barcode was visible through the glassine window in the envelope’s return address field.  When scanned, the barcode revealed a sequence of twenty-five numbers which were comprised of the letter vendor’s five-digit code identifying the debt collector, the letter vendor’s eight digit identifier for the particular mailing and a twelve numbers for the date and time of mailing.  The numbers did not contain or resemble the consumer’s account number and were a unique tracking number used by the letter vendor to track and identify returned mail.

The consumer filed a motion for summary judgment urging the court to adopt a strict prohibition on the use of barcodes consistent with other precedent within the district and contended that in the wake of Douglass, “district courts in the Third Circuit have uniformly applied Douglass to prohibit barcodes that when scanned reveal a “sequence linked to the addressee’s account information.”” Anenkova at *13.  The court rejected the argument and in doing so, may have provided the first sign that courts in the Third Circuit may be tempering their application of Douglass.

The district court first addressed the issue of whether there is a benign language exception to 1692f(8).  Section 1692f(8) prohibits debt collectors from using any language or symbol, other than their address and business name (as long as it does not indicate it is a debt collector), on any envelope communicating with a consumer.   The court noted that while the Fifth and Eighth Circuits have recognized a benign language exception, the Third Circuit in Douglass declined to make that determination.    Instead, the Douglass court concluded that “the contours of such an exception must comport with the purposes of the Act.”  Douglass, 765 F.3d at 303.  In rejecting the consumer’s argument that Douglass prohibited all barcodes, the court stated that “[o]nly those barcodes or QR codes, visible to the public, that disclose that the communication is a debt collection effort and exposes the debtor’s financial predicament and personal identifying information violate 1692f(8).”  Id.

The court concluded that a benign language exception to section 1692f(8) exists and depending on the circumstances of the case, it applies to barcodes.  In doing so, the court noted that the FDCPA was intended to protect the debtor’s privacy and prevent abusive and coercive debt collection practices.  “Thus, if the language and markings do not intrude upon the debtor’s privacy by revealing her personal information, or identifying her as a debt or the communication as a debt collection matter, they are not abusive or coercive.” Anenkova at *11. The court further supported its position by relying upon the FTC guidelines which advise that “a debt collector does not violate §1692f(8) by using an envelope printed with words or notations that do not suggest the purpose of the communication.”  53 Fed. Reg. at 50097-02, 50108.    

Having concluded that a benign language exception exists, the court turned to the barcode at issue in this case to determine whether the scanned barcode implicates the privacy concerns of 15 U.S.C. §1692f(8).  The court concluded it did not.  The barcode, while containing a unique tracking number used by the letter vendor to identify returned mail, did not contain the consumer’s account number or her personal identifying information nor did it identify her as a debt or refer to the debt.  It therefore did not implicate the FDCPA’s purpose to prohibit abusive debt collection practices and to protect the debtor’s privacy.  The court concluded the information was benign and granted summary judgment in favor of the debt collector.