Woman Awarded $83 Million Over Wrongful Credit Dispute

May 26, 2015

 

 

For over a year, Portfolio Recovery Associates LLC (PRA) relentlessly pursued a woman for a $1,130.14 credit card debt. The problem was, they were pursuing the wrong person.

 

This week, a Missouri jury ordered PRA to pay $83 Million to Maria Guadalupe Mejia.  The award was $252,000 in damages for a debt that didn’t belong to her and another $82,990,000 in punitive damages for malicious prosecution.

 

PRA will be appealing what they call an “outlandish verdict that defies common sense”. PRA hope and expect that the judge will set aside what they consider an inappropriate award.

 

Portfolio Recovery is one of our nation’s largest debt buyers. They sued Mejia in February 2013 over a credit card debt. The card actually belonged to a man in Kansas City who had a name similar to Mejia’s. Like many debt collectors, Portfolio did not have the proper documentation for the debt, but pursued Mejia anyway.

 

For 15 months Portfolio Recovery went after Mejia after she received a notice of the lawsuit. She stated the lawsuit terrified her. She thought they would come to her house and arrest her. Mejia went to an attorney, but Portfolio Recovery continued to collect on the debt. The attorneys finally filed a counterclaim alleging malicious prosecution and violation of the Fair Debt Collection Practices Act (FDCPA).

 

The judge sided with Mejia ruling the debt collector had “acted in bad faith, abused the discovery process and repeatedly violated this court’s discovery orders.”  A jury was later asked to make a decision on damages when they came up with the $82.9 million plus $252,000.  That award amounts to approximately half of the company’s net income in 2014.

 

If this verdict is upheld, half the award would go to Mejia and her attorneys, and the other half would go to Missouri Attorney General’s office to set up a victims’ compensation fund. Missouri, as well as other areas have received numerous complaints against Portfolio Recovery.

 

Among attorneys, Portfolio has a reputation for ‘scorched earth-take no prisoners’ meaning they’ll go after debtors, take them all the way to court, make the consumer spend a lot of money on litigation, even if the debtor is in the right. Perhaps this huge slap on the wrist will make Portfolio think again about their aggressive litigation and collection tactics.

 

If you’ve had a debt collector wrongly pursue you, tell them to validate the debt in writing. It’s crucial you know your debt collection rights. If you’re not sure how to approach a debt collection matter, contact an attorney to help you understand your rights.

 

If you have had a violation of the FDCPA, contact our credit dispute and consumer rights attorneys at 303-618-2122, or visit our website at www.gantenbeinlaw.com.

 

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Gantenbein Law Firm