Even though an account number and a quick response code was visible in the window of its collection letter envelope, an Appeals Court has ruled that the collection agency which sent the communication did not violate the Fair Debt Collection Practices Act because what it was attempting to collect on — an unpaid highway toll — is not subject to the statute.
The Court of Appeals for the Third Circuit affirmed a lower court’s ruling dismissing the class action lawsuit on the grounds that highway tolls are not debts for the purposes of protection under the FDCPA. A copy of the ruling in St. Pierre v. Retrieval-Masters Creditors Bureau, Inc., can be accessed by clicking here.
Tolls are akin to taxes and are not meant to be in the same category as personal debts, the court ruled.
The defendant was attempting to collect $1,200 in unpaid tolls from the plaintiff. The collection letter sent to the plaintiff included a glassine window with the plaintiff’s name and address. Also visible through the window was an account number and a QR code that could be scanned by a smartphone and would then display details about the plaintiff’s account. The plaintiff filed a class-action lawsuit alleging the letter violated the FDCPA. The court did not rule on whether the letter violated the FDCPA, instead ruling the attempted argument moot because the letter was not subject to the statute.
The FDCPA covers debts related to personal, family, or household purposes. In seeking to determine whether highway tolls met the definition of a debt, the court applied a three-prong test:
- whether the underlying obligation arises out of a transaction
- if the obligation arises out of a transaction, what “money, property, insurance, or services” are the subject of the transaction
- whether the characteristics of that “money, property, insurance, or services” are primarily for personal, family, or household purposes
Because the plaintiff chose to drive on the highways and could have taken alternative roads that do not charge tolls, and that the toll itself is not for personal, family, or household purposes, but to maintain and repair the highways themselves, the toll does not meet the definition of a debt under the FDCPA, the court ruled.
Moreover, the fact that highway tolls resemble taxes—while not a sufficient basis on which to conclude they do not arise out of a “transaction” at the first stage of our inquiry—does at this step reinforce the conclusion that the services rendered are not primarily for personal purposes. Like taxes, highway tolls are imposed for public benefit and “without reference to peculiar benefits to particular individuals or property.”
