Debt Collector's Dirty Deeds Result in $24 Million Fine
Debt Collector's Dirty Deeds Result in $24 Million Fine
Repeat offender Portfolio Recovery Associates penalized by consumer bureau
If you’ve ever been contacted by a debt collector, you know it is an unpleasant experience.
If you owe the debt can can’t pay, there’s nothing a person on the phone can do to make money show up.
What’s worse, though, is being contacted by a debt collector for a debt you don’t owe or for one that has been settled.
In some cases, debt is time barred — meaning even if you did owe the debt at one point, it’s no longer collectible.
Unfortunately, that doesn’t stop third-party debt buyers from trying to squeeze some money out of you.
Sometimes, these collectors use illegal tactics to convince customers who don’t owe that they should pay at least something.
I wrote recently about a debt collector for Citibank and Discover filing nearly 100,000 “junk lawsuits” — suits for debts that either weren’t owed or were time-barred.
Fortunately, that debt collection outfit was penalized by the Consumer Financial Protection Bureau (CFPB).
Now, another major debt collector, Portfolio Recovery Associates, is facing a $24 million fine for a range of unlawful collection practices.
The lawbreaking included:
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.
As the CFPB notes, Portfolio is a repeat offender:
“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.”
It’s good to see bad actors in the debt collection space being held accountable.
But what can you do if you are being hounded by a debt collector?
Ask them to contact you only in writing. Yes, you need to do this in writing. Send them a letter telling them to put any and all claims in writing. If you do this and they call you after you’ve served written notice, they are breaking the law.
Ask them for written documentation that you actually owe the debt. The collector should be able to produce information about the original account, amount currently owed, and that the collector now owns the debt and has the legal right to collect it.
Check the statute of limitations for collection in your state — typically, there’s a 5–7 year window for debt collection (dating from the last payment made).
You may want to consult an attorney or other advocate to help you negotiate with a collector if you owe the debt.
If a collector is harassing you, you may be able to sue them for violating the Fair Debt Collection Practices Act and/or the Telephone Callers Protection Act. A consumer protection attorney can advise you about this.
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