Encore and PRA: the orders, and the orders they broke
In September 2015 the CFPB found that Encore Capital and Portfolio Recovery Associates, the two largest debt buyers in the country, sued people with robo-signed affidavits, sued on debts past the statute of limitations, and collected without the documents to back their claims. It ordered up to $61 million in refunds and $18 million in civil penalties. In 2020 and 2023 the Bureau returned to court saying both companies had violated those orders.
A public record, not a client of this firm. Everything on this page comes from the Consumer Financial Protection Bureau's announcements and orders cited at the end. The findings are the Bureau's; the later cases were resolved by stipulated judgments. Usher Law Group did not represent anyone in these matters, we publish no results of our own, and nothing here predicts the outcome of any other case.
A debt buyer buys accounts that the original lender has given up on, and then tries to collect them itself, often by suing. When the buyer sues, the question is whether anyone at the company actually knows the person owes what the complaint says.
On September 9, 2015, the Consumer Financial Protection Bureau announced orders against the two largest debt buyers in the United States: Encore Capital Group, with its subsidiaries Midland Funding, Midland Credit Management and Asset Acceptance Capital Corp., and Portfolio Recovery Associates. The Bureau's findings described how the collection lawsuits were built.
What the Bureau found
- Robo-signed affidavits. Both companies filed affidavits in court that contained misleading statements, and used documents that described a review of the account that had not actually happened.
- Suits on old debts. Both sued or threatened to sue people after the statute of limitations had run.
- Suing without proof. The Bureau said the companies filed suits with no intention of proving the debts, and made no effort to get the documents that would back up their claims.
- Shifting the burden. Encore, the Bureau said, told consumers the burden of proof was on them to disprove the debt.
- Wrong numbers. Both collected on accounts with incorrect balances, interest rates and payment due dates.
What the 2015 orders required
Encore was ordered to pay up to $42 million in refunds and a $10 million civil penalty, and to stop collecting on more than $125 million in debts. Portfolio Recovery Associates was ordered to pay $19 million in refunds and an $8 million civil penalty, and to stop collecting on $3.4 million in debts.
Both companies were required to change how they sue. The orders barred them from reselling debts to third parties, from collecting debts they could not verify, and from suing on time-barred debts, and required them to have original account documents before filing suit and to make their affidavits accurate.
Encore Capital Group (Midland)
Robo-signed affidavits, suits on time-barred debts, collection without documentation. Also required to stop collecting more than $125 million in debts.
Source: CFPB. A public record of someone else's case, not a result of this firm and not a prediction.
Portfolio Recovery Associates
The same pattern of findings. Also required to stop collecting $3.4 million in debts.
Source: CFPB. A public record of someone else's case, not a result of this firm and not a prediction.
Then they came back
Encore, 2020. In 2020 the Bureau sued Encore and its subsidiaries in federal court in San Diego, saying they had violated the 2015 order and the law again. The Bureau said the companies sued consumers without having the required documents, used law firms and an in-house legal department without giving required disclosures, failed to provide account documents consumers asked for, and sued on time-barred debts without required disclosures. On October 15, 2020 the Bureau announced a stipulated judgment: $79,308.81 in consumer redress, a $15 million civil penalty, and five more years under the 2015 order's conduct rules.
Portfolio Recovery Associates, 2023. On March 23, 2023 the Bureau announced a proposed stipulated judgment with PRA: at least $12.18 million in redress and a $12 million civil penalty. The Bureau said PRA collected on unsubstantiated debt, sued without the required documents, sued on time-barred debt, failed to send promised documents on time, and, under the Fair Credit Reporting Act, failed to tell people the results of their disputes, resolved disputes late on tens of thousands of occasions, and ran inadequate identity theft investigations. The director said CFPB orders "are not suggestions."
Encore Capital Group, second action
For violating the 2015 consent order: suing without required documents and suing on time-barred debt without required disclosures.
Source: CFPB. A public record of someone else's case, not a result of this firm and not a prediction.
Portfolio Recovery Associates, second action
For violating the 2015 order and for credit-reporting dispute failures under the FCRA.
Source: CFPB. A public record of someone else's case, not a result of this firm and not a prediction.
What it means for you now
If a debt buyer sued you, the Bureau's findings are a checklist of what to look for in the papers. The law behind each item is on this site.
- Is the debt too old? Suing or threatening to sue on a time-barred debt violates Regulation F (12 C.F.R. § 1006.26(b)). In New York, most consumer credit suits must be filed within three years, and a later payment does not restart the clock (CPLR 214-i). See zombie debt.
- Does the complaint show the chain of ownership? In New York, a suit on a purchased debt must identify the original creditor and the assignment, and a default judgment needs sworn proof of the chain of title (CPLR 3016(j), 3215(j)).
- Is the amount right? A false statement of the amount is an FDCPA violation (15 U.S.C. § 1692e(2)(A)). See debt you do not owe.
- If you have been sued, do not ignore the papers. The answer deadline is short. Read sued by a debt collector.
The FDCPA and the FCRA each require a company found liable to pay the consumer's reasonable attorney's fees and costs.
The pages this story points to
Zombie debt
Time-barred debts, suits on them, and New York's three-year rule.
Read →Sued by a debt collector
The answer deadline, the defenses, and the claims you can raise.
Read →Public verdicts and settlements
Other people's cases, with the amount, the payer and the source.
Read →Sources. CFPB, CFPB Takes Action Against the Two Largest Debt Buyers (Sept. 9, 2015); CFPB, CFPB Settles Lawsuit with Encore Capital Group (Oct. 15, 2020); CFPB, CFPB Orders Repeat Offender Portfolio Recovery Associates to Pay More Than $24 Million (Mar. 23, 2023); 12 C.F.R. § 1006.26(b); N.Y. CPLR 214-i, 3016(j), 3215(j).
Common questions
Who are Encore and PRA?
Encore Capital Group, whose subsidiaries include Midland Funding, Midland Credit Management and Asset Acceptance, and Portfolio Recovery Associates, a subsidiary of PRA Group, buy defaulted consumer accounts and collect them, often by suing. The CFPB described them in 2015 as the two largest debt buyers in the country.
Does a CFPB order mean I get money?
Only if you fall within the group the order covers and the redress program reaches you. A CFPB order does not decide your own claim. If one of these companies sued you or reported you, you may have your own claim under the FDCPA or the FCRA, with its own deadline.
What is robo-signing?
It is signing sworn statements in bulk without checking the facts they swear to. In 2015 the CFPB said both companies filed affidavits in court that contained misleading statements, from employees who claimed a review of the account that had not happened.
Tell us what they did.
One conversation with an attorney, in your language. We tell you which laws the collector or the credit bureau broke, which deadline runs first, and what to save this week. If it is not a case we can take, we say so and tell you where to go.
(718) 484-7510The FDCPA and the FCRA require a company found liable to pay the consumer’s reasonable attorney’s fees and costs. Our fee arrangement is confirmed in a written retainer before we begin. English, Russian and Spanish in-house; an interpreter for any other language.