Can a Debt Collector Send A Collection Letter With A Visiable QR On The Envelope?
DiNaples v. MRS BPO, LLC, et al.
In a recent published decision, the Third Circuit Court of Appeals upheld a judgment issued by the Western District of Pennsylvania in a class action matter regarding the lawfulness of printing confidential information in the form of “QR” codes on the outside of collection letter envelopes.
Under the Federal Debt Collection Practices Act (FDCPA), collectors are prohibited from printing confidential or sensitive personal information on the accessible portion of an envelope or other mailer sent to a borrower for the purpose of collecting a debt. Under the court’s prior decision in Douglass v. Convergent Outsourcing (765 F.3d 299), it was determined that printing a borrower’s internal collections account number on the outside of a collections letter envelope constituted unauthorized disclosure of confidential information in violation of the FDCPA.
In reviewing the recent matter of DiNaples v. MRS BPO, LLC, et al. (D.C. No. 2-15-cv-01435), the court was faced with the question of whether a “QR” (or “quick response”) code in which a debtor’s account number is in bedded constitutes an unlawful act or a violation of the FDCPA. In DiNaples, the plaintiff debtor received a debt collection letter inside an envelope bearing not only the plaintiff’s name and address but also a scannable QR code. Upon scanning the code with a free app on the plaintiff’s smart phone, the plaintiff was directed without any further action or barrier to her account number provided by the debt collector.
On filing legal action on her own behalf and on behalf of those similarly situated, the plaintiff sued the defendant collector for violating the FDCPA by making unauthorized disclosures of confidential information. The district court certified the class action and, in response to cross motions for summary judgment, found in favor of the plaintiff class, finding unequivocally that the actions of the defendant collections agency violated the FDCPA. The defendant timely filed an appeal, arguing that it was a simple, harmless error of fact and that it innocently misunderstood the law’s specific prohibitions regarding printing information on collections envelopes. The Third Circuit Court of Appeals reviewed the matter and sided in full with the lower court’s ruling in the plaintiffs’ favor.
In its de novo review, the appellate court asked whether there was a legal equivalent between the QR codes printed on the envelopes at issue and printing the borrowers’ account numbers as was determined prohibitive in the Douglass case. The Third Circuit panel found that the problem with printing account numbers on collections envelopes is because it results in disclosure of confidential information and that providing account numbers by QR code is not functionally different. In the case at issue, the same confidential information was simply made available via a QR code that can be scanned without tampering or otherwise leaving any indication for the recipient that sensitive information was accessed by a third party. Since QR codes can be scanned using any number of free applications and since nearly everyone is in constant possession or at least has access to a smart phone these days, the account number revealed by scanning the code is effectively equally accessible as simply printing the account number on the envelope.
The court made no finding as to whether the same violation would occur if a password or other information were required to access the account information after scanning the QR code, but the appellate court was clear in its rejection of the defendant-appellant’s argument that providing access to the account numbers via unprotected QR codes was excusable error. In sum, the court concluded that printing embedded confidential information in a QR code on the outside of a collections envelope is the legal equivalent of printing the confidential information directly on the envelope and that both constitute unauthorized disclosures in violation of the FDCPA.
Significantly, the appellate court’s opinion also included an analysis of the plaintiff’s standing to file the matter in Federal court in the first instance. The Court notably disagreed with the defendant-appellant collector that some actual incident of harm must be shown by the plaintiff in order to meet the requisite threshold and, instead, found that the mere disclosure of sensitive or confidential information, including the disclosure of a collection account number embedded in a QR code, constitutes a tangible injury. No evidence or allegation of interception or access by an intended third party is required to show requisite harm. The disclosure itself is sufficient to establish injury.
I am Being Harassed by a Debt Collector and My Insurance Should Have Paid
If you are being harassed by a debt collector to pay a bill that your insurance company should have paid, you may have found that simply telling the collector this did nothing to persuade them to stop their collection attempts. This is because it is not a debt collector’s job to investigate insurance payments or question your healthcare provider about amounts it claims are past due. If your doctor or hospital has turned your account over to a collection agency when it shouldn’t have, it is up to you to find out why your insurance company did not pay the bill and work with them and your healthcare provider to ensure that they do.
When a Debt Collector is Attempting to Collect on Medical Bills
A debt collection agency attempting to collect on a past due medical bill was hired by your healthcare provider to collect the past due amount for them. The agency receives just enough information from your doctor to know how to contact you and how much you owe. Its only job is to collect the amount past due for the doctor so that it can retain a percentage for its fee. Debt collectors simply accept their client’s information as true; that you owe this amount and did not pay it. They know nothing about your medical treatment, insurance plan, or payments that should have been made by your insurance company. Not only do they know nothing about this, it would violate privacy laws for your insurance company or healthcare provider to discuss this with them. They also are only being paid to collect on the account, not to investigate any claims that the bill should have been paid by a third party. So, telling the debt collector your insurance should have paid will not stop collection attempts and you must then work with your insurance company and healthcare provider to ensure the bill is paid by the insurance, if in fact it should have been.
Stopping Collection Attempts for a Bill the Insurance Should Have Paid
If a debt collector is attempting to collect on a medical bill you believe your health insurance company should have paid, ask them to send you validation of the debt. Once you receive complete information about the debt from the collector, contact your insurance company to determine why the bill was not paid. You may have to talk to your healthcare provider and insurance company several times in order to get the bill paid or an explanation of why the insurance company is not responsible for paying it. If the debt collector continues to harass you after you have determined that the insurance company is responsible for paying the bill, mail them a letter telling them that you dispute the debt and want them to stop contacting you. You should also keep a copy of the letter for yourself, and mail one to the Federal Trade Commission at 6th and Pennsylvania Avenue, NW, Washington, D.C. 20850. Under the Fair Debt Collection Practices Act (FDCPA), the debt collector may then only call or write one more time to let you know that they received your letter and will stop contacting you and advise you of any other action they intend to take, such as filing a lawsuit against you.
If you are being harassed by a debt collector for a medical bill that your insurance company is responsible for paying, please contact our office at 1-800-219-3577, for a free, no obligation case review.
How to Deal with a Debt Collector
How you should deal with a debt collector depends on whether you owe the debt, do not owe the debt, or are unsure if you owe the debt, your financial situation, and your current and ultimate financial goals.
How to Deal with a Debt Collector if You Owe the Bill
If you know you owe the bill and the amount the debt collector is attempting to collect is correct, what you do next depends on whether you have the money to pay the bill or not.
You Can Afford to Pay the Entire Bill or Make Payments on the Bill
If you can afford to pay the bill in full, simply ask the debt collector what forms of payment are accepted. If the collection agency has a website where you can pay using a credit or debit card that is the best way to make a payment. Using a card will provide you with proof of payment via your statement and allow you to enter the amount of the payment yourself, to help ensure that you are not over or undercharged. If you have a credit card to put the payment on, that will provide you with more protection against the agency double charging you than a debit card would give you. If debit and credit card payments are not accepted, or you do not have a card, the next best option is to mail the collection agency a check. Be sure to include a payment coupon with your payment and/or write your account number on the check. You should never pay a debt collector with a money order if you can avoid doing so; there are just too many things that can go wrong which may result in you losing money and spending unnecessary time resolving the issues.
If you can afford to pay the bill, but not all at once, tell the debt collector how much you can afford to pay each month and ask if that will stop the collection calls. If the agency is agreeable to that, make your payments on time each month to prevent further collection attempts and harm to your credit. Always pay in a way that provides you with a receipt without having to obtain one from the debt collector.
You Cannot Afford to Pay the Entire Bill or Make Payments on the Bill
If you are simply unable to pay the bill or even make payments on it, do not waste your time explaining your situation to the debt collector. The collection agency was hired by the original creditor to collect the debt and cannot reduce or forgive any part of it. You basically have two options; ignore the collection attempts or write the agency a letter forcing them to stop. Which option is best for you depends on your financial goals and future ability to pay the debt. For example, if you anticipate being able to make payments in a couple of months, you might just be able to ignore the calls until you can pay. If you have no intention of paying, are considering filing bankruptcy, or will not be able to pay for quite some time and simply want the calls to stop now, you will need to write the debt collector a letter telling them to stop contacting you. Include your account number and full name in your letter. Be sure to keep a copy of the letter for yourself and mail a copy to the Federal Trade Commission at 6th and Pennsylvania Avenue, NW, Washington, D.C. 20850. Under the Fair Debt Collection Practices Act (FDCPA), the debt collector may contact you only one more time after receiving your letter in order to let you know that they received it and will stop contacting you, as well as to advise you of any other action they intend to take, such as filing a lawsuit against you.
How to Deal with a Debt Collector if You Do Not Owe the Bill
If a debt collector calls you to collect on a bill that you do not owe, how you should deal with them depends on why you believe you do not owe the bill.
You Already Paid the Bill
If you paid the bill in full to the original creditor and the account should not have been turned over to collections or should be removed from collections, you will need to contact the original creditor and discuss this with them. A collection agency is simply hired by a creditor to collect a debt for them. They believe whatever information they are given by the person who hires them and will not waste their time second guessing the creditor or acting as a go-between for you and the creditor. This is because they get paid if they collect the debt, not if they resolve it in any other way.
The Bill is Not Yours
If the bill is a result of identity theft or the debt collector has you confused with someone else, ask them to mail you information about how to report the identity theft or confusion regarding your identity to them and stop them from attempting to collect the debt from you. Complete whatever forms you receive, gather any documentation or information requested and return it to the debt collector. If this does not stop the collection attempts, you may need to consult with a consumer protection attorney to help you enforce your rights.
You Dispute the Original Creditor’s Charges
If you do not believe that you owe the bill because you dispute the original creditor’s charges, you will need to contact the creditor and discuss this with them. Debt collection agencies are hired by original creditors to collect on the debt they claim you owe them. They have no authority to renegotiate the original contract or settle disputes regarding the contract. If the original creditor refuses to reach a new agreement and reduce the amount you owe or remove the account from collections, you may need to consult with a consumer attorney to help you understand your rights and your options.
Your Insurance Company Should Have Paid the Bill
If you do not owe the debt that a collection agency is attempting to collect from you because your health insurance company should have paid it, you will need to discuss this with your insurance company and healthcare provider. Debt collection agencies do not have the legal authority to speak with your insurance company and have no real interest in helping you resolve the matter with your healthcare provider, as they generally only get paid if they collect money from you, not if they help you get your insurance company to pay it.
The Debt Was Discharged in a Bankruptcy
If a debt collector is attempting to collect a debt that was discharged in bankruptcy, let them know that it was discharged and ask them to send you information about what documentation they need and how to provide it to them. Once you have sent them all of the requested information and documentation, the collection attempts should stop immediately. If they do not, contact a consumer protection attorney to help you enforce your rights and possibly make the debt collector pay you money.
How to Deal with a Debt Collector if You are Unsure if You Owe the Bill
If you are contacted by a debt collector and are unsure if you owe the bill, ask them to provide you with debt validation information. This should come in the mail and include the name of the original creditor, the amount owed, and any contracts or judgments the debt collector may have regarding the debt. Keep in mind that oftentimes debt collectors do not have any documentation of the debt, such as a signed contract, and if after receiving the name of the original creditor and amount owed, you are still unsure if the debt belongs to you, you should contact the creditor to help you determine if you do in fact owe the debt.
If you are being harassed or abused by a creditor or debt collector please contact our office at 1-800-219-3577, for a free, no obligation consultation.
Can I Pay a Debt Collector and What Do I Need to Know Before I Do?
Debt collectors are hired by the original creditor, or person who is owed money, to collect the debt for them. Once a creditor hires a debt collector, all payments should be made to the debt collector and not the original creditor. However, before paying any debt collector you should obtain certain information from them about the debt and keep records of any communication with the debt collector or any payments made to them.
Before You Pay a Debt Collector
One of the newest ways scam artists have come up with to defraud consumers is the fake debt collector. Scammers call you claiming to be collecting on a debt and attempt to pressure you into paying it immediately, before you have the chance to discover that you do not really owe any money and the collection agency is not real. So, before you pay a collection agency, ask them to send you debt verification information, which should include the name of the original creditor and the amount owed. If you do not recognize the original creditor’s name or believe the amount to be false, contact the creditor and ask what you owe them and why. If you recognize the creditor and the amount claimed as due is correct, be sure to make any payments to the debt collection agency in a form that provides you with proof of payment; do not expect the agency to provide you with a receipt, as many do not.
How to Pay a Debt Collector
The best way to pay a debt collector is by credit card on the collection agency’s website. This will provide you with proof of payment via your credit card statement, ensure that you are the one entering all of the information so that the payment amount is correct, and provide you with more protection against the agency double charging than a debit card would give you. If you do not have a credit card or do not wish to use one to make the payment, the next best option is to mail the debt collection agency a check. Be sure to include a payment coupon with your check and/or write your account number on the check. Review your bank statements regularly until you see that the check has cleared in order to ensure that it was cashed and then call the debt collector to make sure that the payment was posted to the correct account. If you must pay using a debit card, make the payment on the agency’s website to ensure the amount of the payment is entered correctly, and then keep an eye on your bank statements to ensure that your debit card is not charged again without your authorization. You should never pay a debt collector with a money order. There are too many ways for you to lose your money if your payment is lost or not applied to the correct account.
If a debt collector has misapplied your payment, double charged you, or abused you in any other way, please contact our office at 1-800-219-3577, for a free, no obligation consultation.