Consumer Financial Protection Bureau Takes Legal Action Against Debt Collection Company That Engaged In Illegal Debt Collection Practices

The law protects consumers against unfair and abusive debt collection practices by creditors and collection agencies, but despite this, debt collectors still often try to get away with being pushier and less honest than the law requires them to be.  Every year, the Consumer Financial Protection Bureau (CFPB) receives many thousands of complaints from consumers about illegally deceptive or coercive actions by debt collectors in pursuit of the repayment of debts.  When enough complaints come in about the same company’s illegal debt collection practices, the CFPB takes action by seeking a court order requiring the offending company to pay penalties.  This month, the CFPB is seeking a court order requiring one of the country’s largest debt collection companies to pay $24 million in penalties.  If you have been the target of illegal or abusive debt collection practices by Portfolio Recovery Associates or another debt collection company, contact a  Boca Raton debt lawyer.

Portfolio Recovery Associates Has Been a Thorn in the Side of the CFPB for Years

Portfolio Recovery Associates (PRA) collects lots of payments from consumers on debts it has purchased from other creditors.  In the past two years, it collected $183 million in consumer debt.  The CFPB also collects lots of complaints about PRA.  Since 2017, it has received more than 20,000 complaints about illegal debt collection practices by PRA.  These are some of the illegal practices that consumers have alleged in their complaints to the CFPB:

Continuing debt collection efforts after the statute of limitations on the debt had passed

Not providing consumers with written documentation about their debts, as required by law

Filing business to consumer lawsuits over unpaid debts without fulfilling all the legal requirements for filing a debt collection lawsuit

Threatening to file lawsuits when it did not have legal grounds to do so, for no reason other than to intimidate consumers into paying

This is not the first time the CFPB has taken legal action against PRA.  In 2015, the CFPB obtained a court order against PRA, although the Consumer Affairs website did not give any additional information about the nature of this court order.  It did say, however, that the CFPB alleges that PRA has not complied with the court order issued in 2015.

In its current legal action, the CFPB wants PRA to pay $24 million in penalties.  If the court issues the order, then PRA must pay $12 million to consumers it directly harmed with its illegal debt collection practices.  The effect of this will be similar to when plaintiffs receive damages awards from the civil court or when crime victims receive restitution payments from convicted defendants.  The other $12 million it must pay will go to the CFPB’s victim relief fund.

Work With a Debt Lawyer About Debt Collection Abuse

A South Florida debt lawyer can help you if debt collection companies have used unethical or illegal practices to get you to pay debts you could not afford.  Contact Nowack & Olson, PLLC in Boca Raton, Florida to discuss your case.

Source:

consumeraffairs.com/news/cfpb-throws-the-book-at-one-of-the-biggest-debt-collection-companies-in-the-us-032423.html