PORTFOLIO RECOVERY ASSOCIATES

Portfolio Recovery Associates is a company that buys collection accounts from credit card issuers, student loan lenders, retailers (i.e. department stores and other retail stores), hospital or other medical providers, utility companies, consumer finance companies, auto finance companies, and cellphone providers for 4 to 10 cents on the dollar.

Portfolio Recovery Associates have a patten of aggressive debt collection practices. In 2011, according to the Public Access to Court Electronic Records (PACER), PRA was sued over 700 times for harassing consumers under the FDCPA. According to the CFPB, more than 11,000 complaints were filed between July 2013 and January 2014 against various debt collection companies, including Portfolio Recovery Associates. PRA ranked third for having the most complaints” (Weston Legal).

On September 9, 2015, Consumer Financial Protection Bureau (CFPB) took action against Portfolio Recovery Associates and found Portfolio Recovery Associates: used affidavits that misrepresented that the affiants had reviewed original account-level documentation confirming the consumers’ debts when they had not, submitted affidavits with documents attached that they claimed were the consumers’ specific account contracts or records when they weren’t.

To right the Portfolio Recovery Associates’ wrongdoing, the company was asked to pay $19 million in consumer refunds and an $8 million penalties. The company was prohibited from:

collecting on over $3 million worth of debts, were required to stop collecting unsubstantiated debt and filing lawsuits that are unenforceable and incorrect, were prohibited to use affidavits to collect debts unless the statements contained within the affidavits specifically and accurately describe the signer’s own personal knowledge of the facts and the documents referenced in the affidavit are attached, and were forced to provide consumers with credible information and original documents to file a lawsuit or collect a debt.

The latest scandal occurred in 2020, when Portfolio Recovery Associates were found to have violated the Worker Adjustment and Retraining Notification Act when 200 employees were laid off via email without any prior notice.

REFERENCES

Bills.com website- https://www.bills.com/learn/debt/portfolio-recovery-associates

CFBP website-consumer financial protection bureau-  https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes-action-against-the-two-largest-debt-buyers-for-using-deceptive-tactics-to-collect-bad-debts/

John Skiba, Esq. | Sep 9, 2015 Midland Funding and Portfolio Recovery Associates Slammed by Consumer Financial Protection Bureau by | Collection Law Suits, Debt Collection Lawsuits, Fair Debt Collection, FDCPA Claims, Newsletter- https://skibalaw.com/midland-funding-and-portfolio-recovery-associates-slammed-by-consumer-financial-protection-bureau/

https://hbr.org/2007/06/companies-and-the-customers-who-hate-them

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WHAT IS NEXT….

In the next episode we will talk about Alternative Dispute Resolutions and Mediation