CFPB orders Portfolio Recovery Associates to pay $24M

The CFPB on Thursday announced it has filed a complaint and a proposed stipulated final judgment and order against Portfolio Recovery Associates, LLC, one of the largest debt collectors in the United States.

On September 9, 2015, the Bureau issued an order against Portfolio Recovery Associates (2015 Order) to address the Bureau’s findings that Portfolio Recovery Associates violated the Consumer Financial Protection Act of 2010 (CFPA) and the Fair Debt Collection Practices Act (FDCPA) in connection with Portfolio Recovery Associates’ debt collection practices.

The Bureau's complaint alleges that Portfolio Recovery Associates violated the 2015 Order, the CFPA, the FDCPA, and the Fair Credit Reporting Act (FCRA) and its implementing Regulation V. Specifically, the Bureau alleges that Portfolio Recovery Associates violated the CFPA and, in some instances, the FDCPA, when it violated multiple conduct provisions from the 2015 Order, including prohibitions on (1) representing the amount or validity of unsubstantiated debt; (2) collecting on debt without offering to provide necessary documentation to consumers; (3) misrepresenting that it would provide the offered documents within thirty days; (4) collecting on time-barred debt without making required disclosures; (5) initiating debt collection lawsuits without possessing required documentation; and (6) suing to collect time-barred debt.

The Bureau also alleges that several of Portfolio Recovery Associates’ practices for resolving disputes about information it furnished to consumer reporting agencies (CRAs) violated FCRA, Regulation V, and the CFPA. Specifically, the Bureau claims that Portfolio Recovery Associates failed to (1) timely resolve disputes submitted by consumers directly to Portfolio Recovery Associates; (2) properly respond to disputes that Portfolio Recovery Associates deemed frivolous; (3) conduct reasonable investigations of consumer’s disputes; and (4) maintain reasonable policies and procedures regarding the accuracy and integrity of consumer information that it furnished to CRAs.

The Bureau alleges that Portfolio Recovery Associates illegally collected millions of dollars through its unlawful conduct, and that its illegal dispute resolution practices impacted at least tens of thousands of consumers. If entered by the court, the proposed order would require Portfolio Recovery Associates to pay at least $12.18 million in redress to harmed consumers and a $12 million civil money penalty. It would also impose broad injunctive relief designed to prevent Portfolio Recovery Associates from violating the law in the future.