U.S. watchdog orders Virginia debt collector to pay $24 million for illegal practices
2023.03.23 12:42
© Reuters. FILE PHOTO: Signage is seen at the Consumer Financial Protection Bureau (CFPB) headquarters in Washington, D.C., U.S., May 14, 2021. REUTERS/Andrew Kelly/File Photo
(Reuters) – A Virginia company has agreed to pay $24 million over allegedly illegal debt collection practices, the top U.S. agency for consumer financial protection said on Thursday, calling this a repeat offense.
Rohit Chopra, director of the Consumer Financial Protection Bureau, said Portfolio Recovery Associates had already been “caught red handed” in 2015 but had persisted in alleged intimidation, deception and other illegal tactics to collect on unsubstantiated and undocumented consumer debt in recent years.
“CFPB orders are not suggestions, and companies cannot ignore them simply because they are large or dominant in the market,” Chopra added.
In 2015 the CFPB ordered Portfolio Recovery Associates to cease collecting on debts without reasonable basis, selling debt, or threatening to sue or suing when they had no intent to prove their claims. The company agreed to pay $27 million to resolve these allegations.
In Thursday’s statement, the CFPB said the company broke a number of provisions related to that order. The latest $24 million payment agreement includes a fine, as well as repayment to consumers harmed, pending court approval.
Portfolio Recovery Associates did not immediately respond to a request for comment. However the company neither admitted nor denied the CFPB’s most recent allegations.
Thursday’s enforcement action follows the U.S. Supreme Court’s January announcement that it would hear arguments concerning a legal challenge asserting that the CFPB’s funding structure is unconstitutional since it is drawn on funds from the U.S. central bank, not those appropriated by lawmakers.
