On March 23, 2023, the Consumer Financial Protection Bureau (CFPB) has taken action against one of the largest debt collectors in the United States, Portfolio Recovery Associates (PRA), for various violations of law, including a 2015 CFPB order. In the complaint, the CFPB accused Portfolio Recovery Associates of violating numerous requirements of the 2015 order as well as engaging in deceptive conduct in violation of the Fair Debt Collection Practices Act and the Consumer Financial Protection Act, and violating the Fair Credit Reporting Act and its implementing Regulation V.
The CFPB filed a proposed order requiring Portfolio Recovery Associates to pay $12 million in consumer redress and a $12 million penalty, which will go to the CFPB’s victims’ relief fund. Portfolio Recovery Associates is a wholly-owned subsidiary of the publicly traded PRA Group, and its principal headquarters is in Norfolk, Virginia. The recent action is apparently part of the CFPB’s recent efforts to hold repeat offenders accountable.
By way of background, in 2015, the CFPB ordered Portfolio Recovery Associates to pay over $27 million in consumer refunds and penalties for deceptive debt collection tactics. The 2015 order required Portfolio Recovery Associates to adhere to various prohibitions, including collecting debts without a reasonable basis, selling debt, and filing false or misleading affidavits in debt-collection actions. In today’s complaint, the CFPB charged Portfolio Recovery Associates with violating numerous requirements of the 2015 order during the five-year period the order was in effect.
The CFPB’s complaint specifically alleges that Portfolio Recovery Associates engaged in a range of allegedly illegal practices, including 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 complaint also alleges that Portfolio Recovery Associates failed to properly investigate and resolve consumer disputes about the company’s credit reporting.
In addition, the CFPB alleges that Portfolio Recovery Associates violated the Fair Credit Reporting Act and its implementing Regulation V by failing to inform consumers about investigation outcomes, failing to timely resolve disputes, and conducting unreasonable investigations when a consumer alleged fraud or identity theft.
If entered by the court, the order would require Portfolio Recovery Associates to pay $12.18 million to consumers harmed by its allegedly illegal collection practices and take corrective measures to clean up its faulty operations.