ciskey debra jnotices have long been the subject of lawsuits and enforcement actions under the Fair Debt Collection Practices Act. After all, while disagreements about what occurred in telephone calls between consumers and collectors often deteriorated into a “he said/she said” scenario (before everyone got call recording installed, that is), our letters are there for all to see. We send millions of them annually, making their content and format fair game for regulators and plaintiff’s counsel alike. The creativity of counsel in manufacturing law violation allegations is matched only by the creativity of the authors of the letters.

nacs-envelopeLately, the bone of contention has related to what is on or exposed through the envelope and not the demand for payment in the body of the collection letter or the technical presentation of legal disclosures. In July, 2013, the Federal Trade Commission entered into a Stipulated Order with National Attorney Collection Services, Inc., over a number of allegations related to its debt collection practices, and particularly enjoining them from using any business name on envelopes that indicates they are in the debt collection business or using language or symbols, other than their address or business name. The illustration provided here shows the envelope used by the company prior to the entry of the order.

While many who have been around the debt collection industry for some time would chuckle and move on when offered envelopes illustrated in this way, others might argue that this illustration doesn’t necessarily indicate or even imply the letter is from a debt collector. However, the risk related to trying such a tactic is calculable. In this instance the use of the illustration along with other alleged acts cost the agency a cool $1 million.

Contrast this with the Third Circuit Court of Appeal’s decision in Douglass v. Convergent Outsourcing. Convergent’s letter displayed, in addition to the consumer’s name and address, the consumer’s account number, a USPS bar code and a QR code, which, when scanned, would reveal the displayed information and the amount of the debt. The argument was aptly made by Convergent’s counsel that these notations are benign, do not compromise the consumer’s privacy, and are not the kind of language or symbol prohibited by the FDCPA. While the district court agreed, the court of appeals did not, finding the consumer’s account number is not benign, and even if it were, displaying it would still violate the FDCPA because it pertains to the debt, unlike other notations previously allowed by other courts, such as PERSONAL AND CONFIDENTIAL.

headlessOne of my favorite cases related to letter content came out of the district court in Oregon when the FDCPA was barely three years into enactment. In this case, the court found the use of an illustration in a letter with the notation “Is this what you do when you receive our letters?” asking if the consumer ignores her mail implies that she lacks common sense and hence was abusive. It seems laughable now, but this early case was a harbinger that strict and literal compliance with the FDCPA would have to be the practice in the collection industry.

Our challenge in the 21st century is to get the mail opened in an era when electronic communication is highly desired by consumers. Letter vendors offer mailers which resemble mail pieces sent by the government, purportedly achieving a higher than average open rate. This seems on the bleeding edge of risk to me.

Hope is in the air related to potential easing of concern related to the use of alternative and modern forms of communication by regulation from the Consumer Financial Protection Bureau. If the rulemakers are convinced the benefit to consumers outweighs the potential for consumer harm, there might be hope that such methods would be allowed, if care is exercised in their use. The CFPB reports thousands of consumers complain they never received notification of the debt and their right to dispute it. However, many debt collectors I have spoken with report they sent the same notification to consumers who have complained, to the consumer’s verified current address. When the mail that debt collectors send must have a generic appearance, the chance it will get discarded unopened is high. Electronic communication with consumers can solve this problem, reduce complaints, and actually serve consumers’ needs better.

The regulations recently issued in New York State related to debt collection practices acknowledge the desirability of email communication, and sets out specific requirements for the use of email by a debt collector, including: after sending an initial required notice by mail, if the consumer voluntarily provides his email address and affirms it is not an email account furnished by his employer, and consents in writing or via e-sign that he consents to email communication, email communication with the consumer by a debt collector is allowed. This seems like a burdensome process, but at least the rules provide direction for a debt collector to follow.

Debra Ciskey is the Compliance Officer at Wakefield & Associates. Inc. She is a member of the board of directors and a certified instructor for ACA International.