Goldberg Segalla partner Daniel B. Moar was interviewed for a New York Law Journal article examining two recent federal decisions in New York, highlighting the victory for the firm’s Business and Commercial Practice Group in a significant case that positively impacts the debt collection industry.
Dan defended the debt collection agency in a case before the U.S. District Court for the Western District of New York, which held that having consumers’ account numbers visible on the outside of envelopes containing letters from debt collection agencies does not, by itself, violate the federal Fair Debt Collection Practices Act. In this and a Southern District decision, the courts declined to follow the 2014 decision of the U.S. Court of Appeals for the Third Circuit in Douglass v. Convergent Outsourcing, which stated the appearance of an account number with the addressee’s name on a collection envelope did violate the act.
Dan told the New York Law Journal that Douglass had caused alarm in the debt-collection industry because the use of account numbers, some fully visible and some visible in part, was “incredibly common” in communications from collection agencies to debtors. “You had debt collection agencies which would send out literally hundreds of thousands of letters,” he said. “It created a new opportunity for plaintiffs to try to file suit. After you had this ruling [Douglass], you had hundreds of suits filed, often class-action suits.”
He added that the ruling in the Western District case — the first of its kind in New York — is “going to cause a huge sigh of relief” in the debt-collection industry in the Second Circuit. “It is going to allow the courts to do some docket cleaning.”