Barcode Containing Reference Number on Debt Collection Envelope Violates FDCPA

The United States Court of Appeals for the Third Circuit has added to the growing body of law regarding what can and cannot appear on the envelope for a debt collection letter under the Fair Debt Collection Practices Act (“FDCPA”).  The FDCPA, 15 U.S.C.A. § 1692(f)(8), prohibits inclusion of any language or symbol other than the collector’s business address on an envelope of a letter sent to a consumer.  The Third Circuit has now held that inclusion of a barcode viewable through a window envelope that could reveal the consumer’s internal reference number violates the statute.  Morales v. Healthcare Revenue Recovery Group LLC.

Healthcare Revenue sent Morales a debt collection letter in 2014 that, in addition to Morales’s name and address, showed a barcode through a clear window in the envelope.  Scanning the barcode with a smartphone could provide the internal reference number for Morales’s account, which in conjunction with his birthday or e-mail address, could allow anyone to access his account.  When Morales brought a class action for violation of the FDCPA, the United States District Court for the District of New Jersey dismissed the action, finding that Morales suffered no injury-in-fact and therefore lacked standing to sue.

The Third Circuit disagreed, relying in part on its own opinion in DiNaples v. MRS BPO LLC, where the Court found that a QR code on an envelope that could be scanned to provide an account number violated the FDCPA.  Regardless of whether or not the barcode led to an internal reference number and whether or not anyone actually used the barcode in that manner, Morales was not required to show an increased risk of harm, the violation of the statute itself was adequate injury to provide standing and allow Morales’s case to proceed.

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