Debt Collection Company ‘Recklessly’ Gave Customer Info to Others to Recover Debts, Class Action Alleges

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A debt collection company gave private customer information — including account number and balance due — to third parties in order to try and collect the money, a new class action lawsuit alleges.

On Thursday, a class action lawsuit filed by Plaintiff Carmen M. Pagan against Portfolio Recovery Associates LLC (PRA) was moved to a New Jersey federal court, Law360 reported.

The complaint alleges that PRA violated the Fair Debt Collection Practices Act and the New Jersey Consumer Fraud Act by giving customer’s confidential information to outside vendors in order to send collection letters.

Pagan says on June 16 last year, she got a collection letter from PRA that she believed was mailed using a third-party letter business that she never consented to having her private information.

“By using a letter vendor, defendant has recklessly disclosed Pagan’s personal identifying information and private information about her debt to a third party without Pagan’s prior consent,” the complaint reportedly says.

“Defendant unlawfully disclosed information about Pagan’s debt including the account number associated with the debt and the alleged balance due.”

Pagan is looking to represent a Class of New Jersey residents whose private information was given out by PRA since June 16, 2015, in an attempt to collect on Citibank N.A./Sears accounts. 

She says the Fair Debt Collection Practices Act prevents a debt collector from communicating with third parties about a debt without permission. It also prevents publishing a list of consumers who have unpaid debts, which she says she believes PRA did.

“By publishing the private financial information of the plaintiff and the class, defendant damaged them by exposing their private information to persons who lacked any right or entitlement to know their private financial information,” the complaint reportedly says.

Pagan is also suing for negligence and invasion of privacy, and wants a judge to order an injunction stopping PRA from continuing with the alleged behavior. 

There are strict laws around how debt collectors can go after money. Earlier this month, an appeals court ruled that a barcode on a debt collector’s envelope that can be scanned to reveal a debtor’s reference number could breach privacy laws because it makes it possible to determine a recipient’s “financial predicament.” 

The Third Circuit Court of Appeals filed an opinion on a class action case ruling that debt collectors do violate the Fair Debt Collections Practice Act when they put QR codes on consumer envelopes that are specific to that debtor. 

What do you think of the allegations in this case? Let us know in the comments! 

Pagan is represented by Yongmoon Kim of Kim Law Firm LLC and Ronald I. LeVine and Eileen L. Linarducci of the Law Office of Ronald I. LeVine Esq.

The Portfolio Recovery Associates Privacy Class Action Lawsuit is Carmen M. Pagan v. Portfolio Recovery Associates LLC, Case No. 2:21-cv-14008, in the U.S. District Court for the District of New Jersey.

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