What should you do if Portfolio Recovery Associates is suing you? Here's what you need to know.
Getting court papers informing you a debt collector is suing you is shocking. Sometimes, you recognize the creditor and the debt, but in other cases, you may need help understanding why the debt collector is suing you because the debt is not yours.
Either way, you must pay attention to the lawsuit papers because ignoring them can cost you money. You may need to fight back and contest the lawsuit, and you can even sue the debt collector for their wrongful actions. Contact a experienced San Diego FDCPA lawyer to fight of justice.
Portfolio Recovery Associates Buys Debt from Creditors to Collect
Portfolio Recovery Associates is one of the country's most prominent debt collectors. The company has a publicly traded stock with roughly $1 billion in market capitalization and is one of the country's top debt buyers.
If you have fallen behind on credit card debt, and the creditor sold your debt to a collection agent, chances are that a company like PRA has bought it.
PRA makes money when it buys debt for pennies on the dollar. It takes all measures possible to collect because the money goes straight to the company.
Many debts go unpaid, but PRA profits when even a fraction of debtors pay what they owe. Then, PRA makes more money to purchase even more debt, and this cycle allows the company to make almost $200 million in profits each year.
PRA Often Uses Shady and Illegal Debt Collection Tactics
PRA's debt collectors pressure you to pay the debt and hope you won't have to sue because court cases involve costs. However, many of PRA's debt collection efforts will lead to lawsuits, and it is here that the company most often violates the law.
PRA says on its website that "our goal is to make debt repayment fair and affordable." In reality, nothing is further from the truth, and there have been nearly 4,000 complaints made against the company with the Better Business Bureau.
PRA has a reputation for aggressive and dubious business practices. The company routinely skirts federal and state laws, often crossing the line.
The CFPB Has Thrown the Book at PRA for Illegal Practices
The Consumer Financial Protection Bureau is familiar with PRA's long history of regulatory violations.
PRA is often under CFPB scrutiny, and a few years ago, it was subject to a CFPB order for the following misconduct:
- 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 the required documentation
- Suing to collect on debt outside the statute of limitations.
The problem was that PRA did not observe the order terms, forcing the CFPB to take additional enforcement action.
Recently, the CFPB fined PRA $24 million for violating the terms of the order from almost a decade ago. In pointed language, the CFPB director said, "CFPB orders are not suggestions, and companies cannot ignore them simply because they are large or dominant in the market."
Be Very Careful When PRA Contacts You
The first crucial thing is understanding the difference between a letter from the debt collector and a lawsuit. A letter may not require you to do anything in response, whereas a lawsuit means you have to respond or else face consequences. Court papers should clearly tell you what they are and when you need to respond.
Be very careful about what you say to PRA. Do not do anything to affirm the debt because the company may trick you into accepting and affirming a debt that was never yours. Getting the money back will be challenging if you pay down a debt you never owed.
You Must Always Respond When You Receive Court Papers
Regardless of whether you believe the debt is yours, companies like Portfolio Recovery Associates are using the legal process to get a default judgment against you.
If you ignore court papers, PRA will obtain a valid default judgment that it can begin to enforce. The only version of events is what the court hears from PRA, and even if you do not owe money or the debt is fictitious, you have foregone your opportunity for due process by not responding. If it does not hear from you, the court will assume you owe the money.
Ninety percent of people who face lawsuits for unpaid debts do not appear in court to defend themselves, and companies like PRA can get away with suing you for a debt you do not owe.
PRA has obtained scores of judgments against debtors that may never have been valid debts in the first place because the defendant does not show up in court.
You Must File an Answer to Any Lawsuit Complaint
Usually, you have 30 days from being served with the process to file an answer to the lawsuit complaint. You may seek an extension from the court if you need more time to file, or you can file a counterclaim with your answer. Regardless, the court needs to hear something from you that complies with their deadlines.
While 30 days may not seem like a lot of time, all you need to do is answer the allegation against you, which is different from fully defending the lawsuit.
Always Hire an Attorney to Help Defend You from a Lawsuit
You should not file anything with the court without an attorney's help. PRA has lawyers who handle thousands of debt collection lawsuits each year. These lawyers know the workings of the court and the legal process extensively.
Even if the debt collection lawsuit is abusive or lacks a proper basis, PRA may get away with it if you cannot effectively tell your story. An experienced attorney can represent your version of the facts and dispute any wrongful assertions that PRA may make in its filings.
Debt Collectors Often Make Mistakes and Your Lawyer Can Expose Them in Court
Just because a debt collector says you owe them money does not mean it is true. Debt collectors buy large tranches of debt at one time, and it is not uncommon for them to buy up to $1 billion from one issuer at one time.
They often cut corners when it comes to verifying debts.
One employee can sign thousands of affidavits simultaneously, stating that they have personal knowledge of debts, so it is easy for them to make mistakes. You may even successfully challenge the debt collector in court because they do not have the documentation to back up their claims. Fighting back in court can cast doubt on their claims against you.
In one recent case, a debtor fought against PRA in court. The debt collector had initially won a judgment against them for an unpaid debt. However, an appeals court reversed the decision, holding that PRA had failed to prove that it owned the person's debt. The alleged debtor had filed an FDCPA claim as part of their counterclaim, although the lower court did not consider it.
You May File a Lawsuit Against PRA
If the debt is invalid or PRA has used illegal tactics to recover from you before they filed the lawsuit, you need to hire an attorney as soon as possible. You may have a potential lawsuit against PRA under the Fair Debt Collection Practices Act and possibly other state and federal laws.
The FDCPA imposes several requirements on debt collectors. The law controls how they can act to collect debt and what they can do in dealing with you. They cannot engage in certain practices that may be abusive, such as calling you repeatedly or using profanity or threats. Debt collectors can call you, but you can restrict whether and how they can contact you in the future.
The FDCPA also requires the debt collector only to make factual statements. For example, the debt collector cannot pretend they are an attorney or affiliated with a lawyer.
Debt Collectors Cannot Try to Collect on Bogus Debts
The debt collector is also not allowed to try to collect on false debts you do not owe. It does not matter that they made a mistake, and any attempt to collect an invalid debt is enough to violate the FDCPA.
Not only will the government potentially take enforcement action against a debt collector (as the CFPB did in 2023), but you can also file a lawsuit against them. You can sue under federal law or a corresponding state law if one exists. Each state has debt collection laws, some even tougher than federal law.
You can file an individual lawsuit against the debt collector or join a class action lawsuit if they have used the same conduct on many people.
Damages in an FDCPA Lawsuit
If you can file and win a wrongful debt collection lawsuit, you may first be entitled to statutory damages of up to $1,000. This money is a one-time payment and covers each violation of the law.
You can also obtain damages based on how you have suffered.
You may experience several consequences of the debt collector's wrongful actions, including:
- The time that you had to devote towards defending against a wrongfully filed lawsuit
- Emotional distress from protecting yourself from wrongful lawsuits in court
- Attorney's fees that you needed to spend to defend yourself in court
- Lost income if defending yourself in court caused you to miss time from work or impacted your career
Punitive damages are not available under the FDCPA. However, many do not know that most illegal debt collection lawsuits fall under state law that may even allow for punitive damages.
Your attorney will guide you toward the best course of action to go on the offensive against companies like PRA. These debt collectors make outsized profits, often at the expense of unknowing and unprotected consumers. You can fight back and hold companies like PRA accountable for what it did.
Other consumers may also benefit when you send PRA a message that it cannot get away with pushing you around. An experienced attorney can handle your case's hard work and details, helping you get justice for what happened.
You Do Not Need to Pay Anything Upfront for an FDCPA Lawyer
It does not cost you anything to get help from a debt collection attorney. An FDCPA attorney will not ask you to pay them anything upfront for their legal representation. Usually, FDCPA settlements and awards will include money to pay for your attorney's fees.
If you do not win your case, you do not owe money to your lawyer.
You need to get legal help to stand up to companies like PRA. Otherwise, the company will be allowed to get away with its wrongful conduct and continue pushing around consumers like you.
How an FDCPA Attorney Will Help with a Portfolio Recovery Associates Lawsuit
One of the main benefits of working with an FDCPA attorney is their experience in handling debt collection cases. They know the FDCPA inside and out, as well as other laws and regulations that govern debt collection practices. This knowledge allows them to identify any violations committed by Portfolio Recovery Associates and take appropriate legal action on your behalf.
An FDCPA attorney can also give you confidence and support during this stressful time. Dealing with debt collection agencies can be incredibly stressful enough, and facing a lawsuit can be downright frightening.
Having an objective attorney by your side can make a world of difference. They can help alleviate your anxieties, put things in perspective, answer any questions you may have, and provide clear explanations of the legal process.
When facing a Portfolio Recovery Associates lawsuit, you need an experienced FDCPA attorney to defend against the legal action. Not only will they identify any possible defenses, but they will also hold debt collection agencies accountable for any violations, and work towards achieving a favorable outcome for you.
Don’t wait to reach out to an consumer protection attorney to help with your Portfolio Recovery Associates lawsuit.
