In March 2023, the Consumer Financial Protection Bureau announced an order against Portfolio Recovery Associates (PRA), one of the nation’s largest debt collection agencies. In our previous post, we addressed how PRA had violated a previous order and provisions of the Fair Credit Reporting Act. In this post, we’ll explore how this order affects impacted consumers.
PRA must pay at least $12.8 million to consumers harmed by the company’s illegal practices. Additionally, PRA must pay another $12 million in penalties, which will be deposited into the Bureau’s victims’ relief fund.
The $12.8 million is designated for consumers who, between March 7, 2016, and September 9, 2020,
- submitted an oral or written dispute regarding the accuracy or collectability of a debt, if the amount collected was higher than what was owed
- paid a debt after receiving a PRA unsubstantiated debt collection demand letter
- paid a debt after receiving particular dispute collection information
- were sued when PRA did not have the required evidence and information regarding the debt
- were sued when their claims were barred by the statute of limitations
PRA must submit a plan for compensating impacted consumers no later than 60 days after the order’s effective date.
Consumers harmed by the firm’s illegal actions but won’t otherwise receive adequate recovery may apply for compensation through the Bureau’s fund.
PRA Must Improve Operations
In addition to the financial compensation, PRA must also take steps to prevent itself from committing future violations.
PRA must end its practice of pursuing debts without sufficient evidence that the debt exists; instead, PRA must obtain the necessary contract or other documentary evidence to establish the consumer’s indebtedness.
PRA must also improve its process for handling complaints, particularly ensuring that those who have debts due to identity theft or fraud are not harassed for these fraudulent debts.
PRA must promptly respond to consumers’ disputes about wrong information and end the practice of providing errant information to credit bureaus.
Moreover, PRA must maintain specific business records for the Bureau, and the court retains jurisdiction over PRA, so the Bureau can more quickly address future violations.
If you’ve been a target of Portfolio Recovery or other debt collectors, you don’t have to fight this alone. Instead, contact an attorney specializing in helping consumers fix their credit reports, debt defense, and debt collection harassment. Attorneys can help you repair your record. And they’ll help you receive compensation for the damage you’ve suffered due to reporting mistakes. Call today.