Class Action Land: Portfolio Recovery Associates
Class Action Land: Portfolio Recovery Associates
Consumer Protection Litigation
Portfolio Recovery Associates LLC has a history of using “deceptive and unfair debt collection practices.” Last year, the Massachusetts Attorney General’s office negotiated a $4 million settlement on behalf of thousands of plaintiffs as part of a class action lawsuit against Portfolio. In the lawsuit, Portfolio was accused of targeting vulnerable consumers who live exclusively off social security or other similar sources of exempt income. According to court records, low-income, elderly, and disabled consumers were especially targeted. Additionally, Portfolio was often unable to prove that the debt being collected was actually owed. They even tried collecting debts that were too old to be collected.
According to the Massachusetts Attorney General’s office, Portfolio violated federal consumer protection law in three ways. First, by demanding payment of debts that Portfolio couldn’t prove were valid; Second, by misleading consumers with exempt income about their protections, and finally by failing to verify the accuracy of the information they reported to credit reporting agencies. Beyond the $4 million, the settlement agreement required Portfolio to change many of its unfair and deceptive business practices, including limiting consumer calls to no more than twice in a seven-day period.
In 2016, Portfolio settled another class action suit for $18 million after thousands of consumers received autodialed collection calls to their cell phones without giving prior consent. The suit, brought in California federal court, ultimately restricted Portfolio’s future use of its Avaya Proactive Contact Dialer to make calls to a cell phone without prior consent. Critics argue that because the Telephone Consumer Protection Act (TCPA) is a product of pre-cellphone times (1991) and neither harms nor causes injury to today’s modern cellphone user, the TCPA actually threatens companies by faulting them for technicalities.
Because Portfolio survives as a business by buying debt for pennies on the dollar and then collecting it at a discount, it should come as no surprise that they’ve managed to find ways to take advantage of its position of power and exploit vulnerable consumers. The legal system is often slow to keep up with rapidly evolving technology and methods used by debt buyers and collectors like Portfolio. That’s why it’s more important than ever to understand your rights and protections as a consumer so you can get ahead of collectors like Portfolio before they try to get ahead of you.
If you’ve received a letter or communication of any kind from Portfolio attempting to collect a debt, ask yourself the following questions:
- Is my income exempt from collection?
- Is the debt invalid?
- Is the debt more than __ years old?
If you answered “yes” or you’re unsure of the answer to any of these questions, pick up the phone to speak with one of our attorneys directly at (727) 538-4188 before you risk losing another dollar. You could be eligible for compensation or reimbursement!
For additional information about Portfolio, or to learn about what to do if you get hit with a PRA lawsuit, please refer to our April 20, 2020 blog post titled “5 Steps to Handling a Portfolio Recovery Lawsuit.”
WARN Act Litigation
Portfolio Recovery Associates (PRA), one of the United States’ largest debt buyers and collectors, was recently hit with another class action lawsuit. The suit, filed on May 12, 2020, is being brought on behalf of approximately 200 former employees of a regional PRA office in Las Vegas. Each of the former employees claims they were either fired or laid off without notice in violation of the Worker Adjustment and Retraining Notification Act, aka “the WARN Act.” The WARN Act was established in 1988 to protect employees and their families by requiring employers with 100 or more employees to provide 60 days of advanced notice to their employees of any upcoming mass layoffs. PRA claims it is not in violation of the WARN Act because of the suddenness of the COVID-19 pandemic. However, the former employees have accused PRA of using the current COVID-19 pandemic as an excuse for firing its entire staff without notice, despite knowing that mass layoff would be necessary sooner rather than later.
In the complaint, the former employees claim that PRA couldn’t have only been reacting to the COVID-19 pandemic because its executives knew for nearly an entire year that the Las Vegas office was struggling in more ways than one. During that time, plaintiffs insist that steps were clearly taken by the company that proves PRA was well aware that its Las Vegas office was in bad shape and headed for closure. For example, as recently as February 2020, just one month before the mass-firing, agents of PRA told Las Vegas office employees hoping to receive raises for their hard work that they would be lucky to have a job at all in the coming months, let alone a raise. Around the same time, the workspace being used for the Las Vegas office was allegedly put on the market to be sublet.
Instead of providing the 60-day notice of the company’s intent to close the Las Vegas office and dismiss its employees, as required by federal law, employees were given no advanced notice. Employees were allegedly blindsided by a March 23, 2020 email from PRA’s Chief Global Operations Officer. In the email, the 200 employees were notified that the Las Vegas office was not only closed, but they were also being fired, “effective immediately.” It wasn’t until later that PRA blamed the mass-firing on the Covid-19 pandemic. Despite these facts, the company insists it is not in violation of federal law.
For more general information about PRA, or to learn about what to do if you get hit with a PRA lawsuit or collection notice, please refer to our April 20, 2020 blog post titled “5 Steps to Handling a Portfolio Recovery Lawsuit” or give us a call to speak with one of our attorneys directly at (727) 538-4188.
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