September 30, 2014

New Case Impacts Use of "Benign" Language

There are various statements by the court in the case of Douglass v. Convergent Outsourcing that agencies should make sure to understand and apply to their notices. 2014 WL 4235570 (3rd Cir. 2014). Of note, the Third Circuit Court of Appeals sets precedent for the federal district courts in Delaware, New Jersey, and Pennsylvania. Despite the limited geographical scope of the opinion, the outcome will generate additional litigation on this issue. Consumer attorneys will actively advance any new theory against the collection industry. The account number at issue in this case was the account number of the collection agency rather than the account number of the original creditor, but this does not appear to be an overly important distinction because practically, there should be no reason for an agency to put the original creditor account number in an envelope window. If an agency is using the same account number as the original creditor, the agency's use of the creditor account number falls squarely within the facts of this case.

Despite the language at issue being visible through the window rather than on the envelope, the court holds "§ 1692f(8) applies to language visible through a transparent window of an envelope." Id. at *3. There are prior cases on this issue that held certain language on an envelope to be "benign" and therefore not in violation of the FDCPA. In the cases supporting "benign" language the information on the envelope "revealed no information about the debtor" (for example "personal & confidential"). Id. at *5. In this case the court states that the account number "is not meaningless - it is a piece of information capable of identifying Douglass as a debtor." Id. at *6.

The court in Douglass believes the account number is a core piece of information related to the consumer's status as a debtor and the agency's debt collection effort. Id. at *4. If the number is disclosed to the public, it may expose the consumer's financial situation. Id. The potential exposure is the essence of the problem and distinguishes this case from the line of cases where "benign" language was on an envelope.

In light of this case, agencies should carefully review any and all information that is on a collection notice envelope or that will appear through the envelope's window with a qualified attorney. The review should include words, letter sequences, number sequences, symbols, bar codes, and any other printed item. Consumer attorneys will consistently argue that any debtor related information is problematic. Agencies may continue to argue that certain statements, numbers, language, or symbols are benign, but it is important to understand that agencies are left arguing the exception to the rule, and the exception is narrowed by the Douglass opinion.

Chad to speak at fall conferences

Topics to be discussed include bankruptcy, the analysis on whether or not certain debts on campus qualify as “student loans” pursuant to the United States Bankruptcy Code, and steps schools can take to better protect their debts from being discharged.  Other topics to be explored are legal hot topics, along with a discussion focusing on the current legal issues facing the collection industry and the impact those issues have on the higher education community.

Williams & Fudge, Inc.'s Student Loans & Receivables Collection Conference in Charlotte, NC

September 28th through October 1st

Texas BUC$'s 2014 Annual Conference "BUC$ by the Bayou" in Houston, TX

October 12th through October 15th

Since 1996, the Texas Association of Bursars and University Cashier$ (BUC$) has organized a professional forum for student business office administrators and staff to discuss issues relevant to student business services. This year's 19th annual Texas BUC$ conference will continue in this endeavor, providing necessary networking opportunities and exhibitions to continually approve the student business services industry across all public, community, and private sector levels.

Minnesota Collection Network's Mega Conference XXII in Minneapolis, MN

October 26th through October 29th

With an emphasis on Upper Midwest professionals working at the university and college level, the Minnesota Collection Network is proud to host it's 26th annual conference on Campus Based Programs and Student Accounts Receivable. The Minnesota Collection Network prioritizes increasing communications between educational institutions and offers this conference as an affordable colloquium to the collection industry for this purpose.

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