Portfolio Recovery Associates Class Action: Debt Letters Illegal

Portfolio Recovery Associates LLC will face a new class action lawsuit accusing it of sending demand letters that violate the Fair Debt Collection Practices Act.

Plaintiff Meyer Sperber is suing defendant Portfolio, a Norfolk, Va.-based debt collection agency. Sperber says Portfolio’s very first attempt to collect a personal debt from him violated the federal FDCPA.

That attempt came in the form of a letter dated May 11, 2015 that included the following language: “Please call Tameisha L Gethers TOLL FREE at 1-800-772-1413 to discuss payment arrangements.”

In his Portfolio Recovery Associates class action lawsuit, Sperber argues that by inviting him to offer payment without notifying him of his right to dispute the debt, the quoted sentence directly violates a provision of the FDCPA. He quotes Section 1692g(b) of the act as saying:

“[a]ny collection activities and communication during the 30-day period may not overshadow or be inconsistent with the disclosure of the consumer’s right to dispute the debt or request the name and address of the original creditor.”

Sperber says the language in the Portfolio letter overshadows and contradicts his right to dispute the debt within the initial 30-day validation period allowed by the FDCPA. He also argues the Portfolio letter violates Section 1692e(10) of the act, which forbids deceptive and false practices in connection with the collection of any debt.

The law Sperber invokes generally forbids a collector from saying or doing anything within the 30-day validation period that may confuse a debtor about their rights under the FDCPA.

Section 1692g of the act requires the collector to send the debtor a notice within five days of its first communication with the debtor. That notice must contain, among other things, a statement alerting the debtor to their opportunity to dispute the validity of the debt within 30 days of receipt of that notice. If the debtor does not dispute the debt or some part of it within that period, the debt will be presumed valid.

The law also includes the provision Sperber cites, forbidding the collector from any activities or communication during that period that could confuse the debtor as to their right to dispute the debt. Courts have found this provision to apply to a broad spectrum of collectors’ actions. One federal appeals court has said a letter can confuse a debtor if it “visually buries the required validation notice, contains logical inconsistencies, fails to explain an apparent inconsistency, or presents some combination of these (or similar) vices.”

Sperber’s Portfolio Recovery Associates class action lawsuit seeks to represent a Class consisting of all persons who according to Portfolio’s own records live in New York state and who were sent an allegedly FDCPA-noncompliant letter similar to the one Sperber received seeking to collect a personal debt, without that letter having been returned by the post office as undelivered.

He seeks an award of statutory damages under the FDCPA, plus attorneys’ fees, court costs, and litigation expenses.

Plaintiff’s counsel is Maxim Maximov.

The Portfolio Recovery Associates FDCPA Class Action Lawsuit is Meyer Sperber v. Portfolio Recovery Associates LLC, Case No. 1:16-cv-02346, in the U.S. District Court for the Eastern District of New York.