Debt Collector Fined $24 Million for Illegal Practices

Advocate Andy

Portfolio Recovery Associates ordered to reimburse consumers, pay a fine for a range of illegal tactics

The Consumer Financial Protection Bureau (CFPB) announced that Portfolio Recover Associates has been ordered to pay $24 million as a result of engaging in illegal debt collection practices.

These practices include: collecting on unsubstantiated debt, collecting on debt without providing required documentation and disclosures to consumers, suing or threatening legal action against consumers without offering or possessing required documentation, and suing to collect on debt outside the statute of limitations.

The order requires $12 million of reimbursement to consumers and an additional $12 million fine paid to the CFPB.

“After getting caught red-handed in 2015, Portfolio Recovery Associates continued violating the law through intimidation, deception, and illegal debt collection tactics and lawsuits,” said CFPB Director Rohit Chopra. “CFPB orders are not suggestions, and companies cannot ignore them simply because they are large or dominant in the market.”

The CFPB notes that Portfolio Recovery Associates was the subject of a 2015 order and is a repeat offender when it comes to illegal tactics to collect debt.

Among the practices identified by the CFPB as illegal, Portfolio engaged in attempts to collect unsubstantiated debt and engaged in threatening behavior in violation of the law.

As CFPB notes, the debt collection company:

  • Made representations about unsubstantiated debts: Portfolio Recovery Associates made at least tens of thousands of representations about unsubstantiated, disputed debts, failing to review the required documentation to support the claim.
  • Threatened consumers with potential legal actions and initiating debt collection lawsuits without offering or possessing required documentation: Portfolio Recovery Associates’ lawyers sent millions of form letters to consumers notifying them of potential legal action without offering to provide all required documents. Portfolio Recovery Associates also initiated thousands of legal actions against consumers when it lacked proper documentation about the debt.

The CFPB notes other violations of both the Fair Debt Collections Practices Act and the Fair Credit Reporting Act.

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Andy Spears is a middle Tennessee writer and policy advocate. He reports on news around public policy issues - education, health care, consumer protection, and more.

Nashville, TN

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