One of the most active debt buyers in Texas courts is under a federal court order limiting when it can sue and what proof it must have first.
PRA must pay at least $12.18 million in consumer redress and a $12 million civil penalty. For seven years it is barred from collecting time-barred debt through lawsuits, arbitration or other legal collections, and it may not file collection suits without specified account documents and chain-of-title records.
- Case
- Consumer Financial Protection Bureau v. Portfolio Recovery Associates, LLC, No. 2:23-cv-00110 (E.D. Va.)
- Citation
- Stipulated Final Judgment and Order, CFPB v. Portfolio Recovery Associates, LLC, No. 2:23-cv-00110 (E.D. Va. entered Apr. 13, 2023)
- Court or agency
- U.S. District Court for the Eastern District of Virginia
- Date
- April 13, 2023
- Law
- FDCPA, FCRA, Other
Summary
The CFPB alleged that Portfolio Recovery Associates, one of the largest U.S. debt buyers, violated a 2015 consent order and federal law by collecting debts it could not substantiate, suing on time-barred debts, and mishandling credit-reporting disputes. PRA settled without admitting or denying the allegations, and the court entered the order on April 13, 2023.
Background
Portfolio Recovery Associates, LLC (PRA) buys charged-off consumer accounts, such as credit cards, and collects on them, often by suing. In September 2015 the CFPB issued a consent order against PRA over its collection and litigation practices.
On March 23, 2023, the CFPB filed a federal lawsuit in Virginia alleging that PRA had violated the 2015 order, the Consumer Financial Protection Act, the FDCPA, and the Fair Credit Reporting Act. The CFPB filed a proposed settlement the same day, and the court entered it on April 13, 2023. PRA neither admitted nor denied the allegations.
What the order requires
According to the CFPB, PRA allegedly represented the amount or validity of debts it could not substantiate, collected without offering required documents, failed to send promised documents within 30 days, collected time-barred debt without required disclosures, filed suits without required documentation, and sued on time-barred debt. The CFPB also alleged that PRA did not properly handle disputes about information it reported to credit bureaus.
The order requires:
- Money. At least $12.18 million in redress to affected consumers and a $12 million civil money penalty.
- No suits on time-barred debt. For seven years from the effective date, PRA may not collect any time-barred debt through litigation, arbitration or any other legal collection.
- Disclosures on old debts. When collecting time-barred debt by other means, such as letters or calls, PRA must give specific written disclosures that it will not sue on the debt.
- Documents before suing. For accounts placed for legal collection after the order took effect, PRA may not sue (other than post-judgment collection) unless it has specified account documents and a chronological list of all prior owners of the debt and the transfer dates.
- Dispute handling. PRA must follow federal credit-reporting dispute rules and adopt a compliance plan.
Our take
This was PRA’s second CFPB order in eight years, and the conduct provisions go to the heart of how debt-buyer lawsuits work: what the buyer actually owns and what proof it has.
A consent order like this is enforced by the CFPB through the court, not by individual consumers. Its terms are still useful, because they show what records a debt buyer of PRA’s size is expected to have before it files suit.
As of this update, the CFPB’s enforcement page lists the case status as “Post Order/Post Judgment,” and we found no public record that the order has been terminated early.
What it means if you’re sued in Texas
PRA is a frequent plaintiff in Texas debt collection suits. If you are sued, request the documents that tie you to the account and show each transfer of ownership. Compare the dates to Texas’s four-year limitations period and to Texas Finance Code § 392.307, which bars debt buyers from suing on time-barred debts.
A missing link in the chain of title or a debt that is too old can be a complete defense. You still must file a written answer by the court’s deadline to raise it.
If you have been sued by Portfolio Recovery Associates, a free case review is available.
Takeaway
If PRA sues you, ask for the account-level documents and ownership history the order requires it to have before suing, and check the debt's age.
Sources
Primary authority
Secondary sources
This summary and analysis are general information, not legal advice. Later decisions, amendments or agency actions may change the law; check the current status before relying on it.