PHILADELPHIA (CN) – A company found to have violated the Fair Debt Collection Practices Act by enclosing collections letters in coded envelopes pushed the Third Circuit for a reversal Thursday.
“There was not an intention to violate the FDCPA,” said Sessions Fishman attorney Michael Alltmont, representing the debt collector MRS BPO.
MRS is seeking a reversal after a federal judge held it liable last year to Donna Dinaples, who received a collection letter for credit card debt inside an envelope stamped with a quick-response, otherwise known as a QR, code.
The code reveals an MRS account number when scanned, something that MRS says helps with its mailing process, and Alltmont struggled Thursday to distinguish the otherwise nondescript envelope from the unencrypted personal information that the code reveals.
As noted by U.S. Circuit Judge Michael Chagares, anyone can scan the code, and thus find an account number, if they download an app.
But Alltmont said Dinaples made no showing that this was likely. “We have to look at the probability that anyone would do that,” the lawyer said.
The argument made little headway, however, with U.S. Circuit Judge Joseph Greenaway Jr.
“We don’t think of invasion of privacy in a general matter based on probability,” Greenaway said.
Yitzchak Zelman, an attorney for Dinaples, pleaded meanwhile for the court to affirm.
When the attorney emphasized that the FDCPA does not allow for any words or symbols on envelopes that show an account number, Judge Chagares noted that the FDCPA also does not allow for businesses to include a company name on the envelope if it shows they are debt collectors. He questioned Zelman how this was different.
“You can’t put a business’s name on the envelope if it shows you’re in the business of debt collection, but someone could Google that business and see they are debt collectors,” Chagares said. “You can’t tell anything from looking at it [QR code], but if you go the extra step, you’ll get some information.”
Zelman, of the law firm Marcus and Zelman, acknowledged the point, but said that the code should have at least been encrypted. MRS has since encrypted QR codes that appear on their envelopes.
On rebuttal, Alltmont pressed the panel to reverse the decision, reminding them that the code on Dinaples envelope was never scanned.
“She has not been exposed to any harm as a debtor,” said Alltmont.
Chief U.S. Circuit Judge Brooks Smith rounded out Thursday’s panel in Philadelphia.