DiNaples v. MRS BPO, LLC

Opinion

 [*277]  OPINION OF THE COURT

CHAGARES, Circuit Judge.

Five years ago, in Douglass v. Convergent Outsourcing, 765 F.3d 299 (3d Cir. 2014), we held that a debt collector violated  [*278]  the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692-1692p, when it sent a collection letter in an envelope displaying the debtor's internal account number with the collection agency. We are now asked to decide whether the same is true when the envelope does not, on its face, show the account number but does display an unencrypted "quick response," or "QR," code that reveals the number when scanned. The District Court held that such conduct violates the FDCPA. We agree [**2]  and will affirm.

The facts underlying this appeal are undisputed. Donna DiNaples had a credit card through Chase Bank. Eventually, she fell behind on her payments, so Chase assigned her account to a debt collection agency called MRS BPO, LLC ("MRS"). MRS sent DiNaples a collection letter as a pressure-sealed envelope that had a QR code printed on its face. QR codes, including the one here, can be scanned by a reader downloadable as an application (better known as an "app") on a smartphone. And this QR code, when scanned with a QR-code reader, revealed the following sequence: "LU4.###1813.3683994."¹ The string "LU4.###1813" was the internal reference number associated with DiNaples's account at MRS.

DiNaples filed a class action lawsuit against MRS, alleging that the collection agency, by printing the QR code on the envelope, had violated the FDCPA, which prohibits debt collectors from "[u]sing any language or symbol, other than the debt collector's address, on any envelope when communicating with a consumer by use of the mails." 15 U.S.C. § 1692f(8). Each side eventually filed a motion for summary judgment.

The District Court granted DiNaples's motion on liability, concluding that MRS violated the FDCPA. [**3]  The District Court explained that this conclusion was required by our decision in Douglass, in which we held that a debt collector violates § 1692f(8) by placing on an envelope the consumer's account number with the debt collector. 765 F.3d at 303, 306. For the District Court, there was no meaningful difference between displaying the account number itself and displaying a QR code — scannable "by any teenager with a smartphone app" — with the number embedded. DiNaples v. MRS BPO, LLC, No. 2:15-cv-01435-MAP, 2017 U.S. Dist. LEXIS 192255, 2017 WL 5593471, at *2 (W.D. Pa. Nov. 21, 2017). The District Court further rejected MRS's contention that DiNaples had not "suffered a concrete injury," explaining that DiNaples was injured by "the disclosure of confidential information." Id. And the District Court rejected MRS's argument that it was protected by the FDCPA's "bona fide error defense." 2017 U.S. Dist. LEXIS 192255, [WL] at *3. The District Court also certified the proposed class.

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