diff --git a/lib/scope.js b/lib/scope.js
index a118aa8b..dadc589e 100644
--- a/lib/scope.js
+++ b/lib/scope.js
@@ -550,24 +550,23 @@ AST_Toplevel.DEFMETHOD("mangle_names", function(options){
             node.variables.each(collect);
             return;
         }
+        if (node.is_block_scope()) {
+            node.block_scope.variables.each(collect);
+            return;
+        }
         if (node instanceof AST_Label) {
             var name;
             do name = base54(++lname); while (!is_identifier(name));
             node.mangled_name = name;
             return true;
         }
-        var mangle_with_block_scope =
-            (!options.ie8 && node instanceof AST_SymbolCatch) ||
-            node instanceof AST_SymbolBlockDeclaration;
-        if (mangle_with_block_scope && options.reserved.indexOf(node.name) < 0) {
+        if (!options.ie8 && node instanceof AST_SymbolCatch) {
             to_mangle.push(node.definition());
             return;
         }
     });
     this.walk(tw);
-    to_mangle.forEach(function(def){
-        def.mangle(options);
-    });
+    to_mangle.forEach(function(def){ def.mangle(options) });
 
     function collect(symbol) {
         if (!member(symbol.name, options.reserved)) {
diff --git a/test/compress/harmony.js b/test/compress/harmony.js
index c094ff54..477d8918 100644
--- a/test/compress/harmony.js
+++ b/test/compress/harmony.js
@@ -1212,3 +1212,36 @@ issue_2676: {
         (class {}).a = 42;
     }
 }
+
+issue_2762: {
+    mangle = {}
+    input: {
+        var bar = 1, T = true;
+        (function() {
+            if (T) {
+                const a = function() {
+                    var foo = bar;
+                    console.log(foo, a.prop, b.prop);
+                };
+                a.prop = 2;
+                const b = { prop: 3 };
+                a();
+            }
+        })();
+    }
+    expect: {
+        var bar = 1, T = true;
+        (function() {
+            if (T) {
+                const o = function() {
+                    var p = bar;
+                    console.log(p, o.prop, r.prop);
+                };
+                o.prop = 2;
+                const r = { prop: 3 };
+                o();
+            }
+        })();
+    }
+    expect_stdout: "1 2 3"
+}