Portfolio Recovery Associates (PRA) is one of the largest debt buyers in
the country. Chances are good that if you owe money, you’ve been
contacted by one of their agents. In May, the company lost a large class
action lawsuit after a federal judge found that the debt buyer had violated
the Fair Debt Collections Practices Act (FDCPA).
The lawsuit began in the Northern District of Illinois in 2012. The plaintiffs
alleged that PRA violated the FDCPA when it sent consumers collection
letters which contained settlement offers on time-barred debts without
disclosing that the debts were no longer legally collectable.
The lead plaintiff in the case alleged that PRA sent her a letter in 2011
to collect on a debt that was originally owed to Capital One Bank in 2004.
The letter offered an installment plan to the plaintiff and agreed to
report the plaintiff’s account as paid in full if she made the specified
payments by certain dates. Other plaintiffs in the class received similar
letters offering payment plans.
All of these letters stated that “We want to help you resolve your
account and have developed three affordable options for you to pay off
this account [including] Single Payment Settlement Option [,] 6 Month
Settlement Plan [and] Balance in Full Payment Plan. Your account will
be considered “Settled in Full” after we post your final payment.”
Section 1692e of the FDCPA states that, “A debt collector may not
use any false, deceptive, or misleading representation or means in connection
with the collection of any debt.” Additionally, Section 1692f prohibits
debt collectors from using “unfair or unconscionable means to collect
or attempt to collect any debt.”
The judge in the case found that PRA had violated the FDCPA by sending
consumers collection letters that contained settlement offers on time-barred
debts without disclosure of the fact that the debt is time-barred. The
court held that this practice was deceptive and misleading on its face
because consumers were unaware that they did not actually owe the debt
that PRA was trying to collect. As a result, the judge granted summary
judgment in favor of the plaintiffs before the case even needed to go to trial.
When a creditor or debt buyer attempts to collect a debt from you, the
first thing you should do is make sure that you actually owe the debt.
PRA was able to get hundreds if not thousands of people to enter into
payment plans for debts that the statute of limitations said that they
no longer owed. Make sure that this does not happen to you by thoroughly
reviewing any letters sent from a debt buyer and by consulting with an
At Loan Lawyers, our Florida debt defense attorneys can review your debts
and the letters you receive from entities trying to collect on those debts.
Depending on your situation, our attorneys can help you negotiate a debt
settlement, fight a wrongful debt collection case, or help you file for
To learn more about your legal rights and options, schedule an appointment
at Loan Lawyers today by calling (888) FIGHT-13 (344-4813).