Portfolio Recovery Associates, one of the largest debt collectors in the United States, is currently facing legal action from the Consumer Financial Protection Bureau (CFPB) for alleged violations of a 2015 CFPB order and other illegal practices.

The action, if entered by the court, would require the company to pay over $12 million in consumer refunds for its illegal debt collection practices. In addition, the company would face a $12 million penalty that would be deposited into the CFPB’s victims relief fund. $24 Million!! That’s a substantial sum!

CFPB Director Rohit Chopra said: “After getting caught red-handed in 2015, Portfolio Recovery Associates continued violating the law through intimidation, deception, and illegal debt collection tactics and lawsuits,”

Portfolio Recovery Associates is a wholly-owned subsidiary of publicly traded PRA Group (NASDAQ: PRAA), and is one of the largest debt collectors in the United States. The company’s principal headquarters is in Norfolk, Virginia. PRA Group reported net income of over $183 million in 2021.

Here are some of the allegations against the company:

  • Collecting on unsubstantiated debt
  • Suing or threatening legal action against consumers without required documentation
  • Suing to collect on debt outside the statute of limitations
  • Failing to properly investigate and resolve consumer disputes about credit reporting

If the court approves the CFPB’s proposed order, Portfolio Recovery Associates would be required to:

  1. Provide redress to consumers: The company would have to pay at least $12.18 million to consumers harmed by its illegal collection practices.
  2. Clean up its faulty operations: Portfolio Recovery Associates would be prohibited from collecting debts unless it has access to certain documents that meet its obligation to have a reasonable basis to believe it is collecting debts that consumers actually owe.
  3. Fix its failures to properly respond to consumers: The company would need to improve their response when consumers report that they do not owe a debt because of fraud or identity theft. It would also be required to adequately respond to consumer disputes in a timely manner about information it has furnished to consumer reporting agencies.
  4. Pay $12 million in penalties: Portfolio Recovery Associates would pay a $12 million penalty to the CFPB, which would be deposited into the CFPB’s victims relief fund.

As an attorney dedicated to protecting the rights of consumers, I am closely monitoring the developments in this case. Unfortunately, these illegal tactics are repeated all too often by unscrupulous debt collectors throughout the country. If you are in California and have been subjected to possible illegal debt collection practices such as harrassment, we can help.

Don’t let debt collectors take advantage of you. Know your rights and protect your financial future. Contact us today at (510) 343-6299 for a free consultation.

Leon Rountree III, is a compassionate consumer protection attorney, committed to assisting individuals experiencing financial hardship. He advocates on behalf of those facing lawsuits from debt collectors and credit card companies, while also taking legal action against creditors who engage in harassing behavior towards consumers during the collection process.