Court Tells Cellphone Auto-Dialing Debt Collector to Hang it Up

Tuesday, October 16, 2012

The economic crash of the past four years has been very good for Portfolio Recovery Associates (PRA). The innovative, debt collection agency was named one of Fortune’s 100 Fastest Growing Companies in 2012 and its stock is trading near its 10-year high.

On Friday, the U.S. Court of Appeals for the Ninth Circuit, told the company, which has offices in California, to stop chasing after alleged debtors by making robocalls to cellphone users in violation of federal law. The court upheld a U.S. District Court preliminary injunction in Jesse Meyer v. Portfolio Recovery Associates prohibiting PRA from using its “Avaya Proactive Contact Dialer” to call cellphones using phone numbers it obtained via skip-tracing.

The court said PRA violated the Telephone Consumer Protection Act (TCPA) when it called 46,657 cellular telephone numbers with California area codes between February 1 and March 31, 2011. It also upheld U.S. District Judge Anthony Battaglia’s granting of provisional class-action certification.

“We have little difficulty concluding the record supports the district court's finding that PRA would have continued to violate the TCPA if an injunction had not been issued,” Appeals Court Judge Morgan Christen wrote.

PRA admitted that it was violating Meyer’s privacy rights, which the law intended to protect, but did not admit that it was violating the law in his case, or thousands of other cases. PRA did say it would stop calling him.

Although Investor’s Business Daily says PRA “has a longstanding culture of compliance, engaging collaboratively with its customers to create realistic, affordable repayment plans,” the company has been the subject of numerous complaints over the years. The Better Business Bureau reports that 1,074 complaints were made, and closed, against the company during the past three years.

Stop Collector Harassment (SCH), an online resource that tracks debt collector behavior, called the number “astounding” and said 472 complaints had been closed in the last 12 months. SCH also said that had recorded PRA being named in 200 lawsuits in 2010, more than 500 in 2011 and close to 200 as of May this year.    

PRA purchases large quantities of debt from creditors or other collection agencies, paying pennies on the dollar for accounts that have been written off as uncollectible. Since 1996, PRA has acquired more than 30 million customer accounts. Its activities are wide ranging through an array of subsidiaries and include collection of personal debt and unpaid taxes.

Complaints about debt collectors often involve the statute of limitations, mistaken identity, illegal threats and other forms of harassment.   

–Ken Broder


To Learn More:

Debt Collector Slammed for Use of Autodialing (by Tim Hull, Courthouse News Service)

Portfolio Recovery Associates (Zachs Equity Research)

Portfolio Recovery Associates Named One of Fortune's 100 Fastest-Growing Companies for 2012 (Investor’s Business Daily)

About Portfolio Recovery Associates (Stop Collector Harassment)

Jesse Meyer v. Portfolio Recovery Associates (U.S. Court of Appeals for the Ninth Circuit) (pdf)

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