Has Portfolio Recovery violated FDCPA 5-day notification rule? If so, how do I respond?

[cliffordo]

Hi all, I have a situation that I haven't been able to find advice about, so I'm curious for thoughts/guidance-

On November 9 (2021), I received a voicemail from Portfolio Recovery, stating simply that they were calling about a debt. Ten days later, on November 19, I received another voicemail stating the same. Then, about three weeks later, I received a notice from a credit card company I was forced to default on due to losing my job because of the covid shutdown, which stated they had transferred the debt to Portfolio Recovery. Only this week (December 13) did I receive a debt validation letter from Portfolio Recovery- in other words, more than a month after their first contact on November 9.

This seems to me to be a very clear violation of the FDCPA, which states that "Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice." This is reaffirmed by California state law, which is where I live.

My question is, what it the best way for me to wield this apparent violation to dissuade Portfolio Recovery from further action, or at least from ultimately suing me? (And yes, I have saved the voicemails, with date stamps, so I have documentation). I assume I should include it in my response to the Validation letter-- anyone have thoughts on the specific language? And if it does come to a lawsuit, would this likely be sufficient for a dismissal or ruling in my favor?

Many thanks for any advice or thoughts. Happy holidays to all.

[BV80]

42 minutes ago, cliffordo said:

Hi all, I have a situation that I haven't been able to find advice about, so I'm curious for thoughts/guidance-

On November 9 (2021), I received a voicemail from Portfolio Recovery, stating simply that they were calling about a debt. Ten days later, on November 19, I received another voicemail stating the same. Then, about three weeks later, I received a notice from a credit card company I was forced to default on due to losing my job because of the covid shutdown, which stated they had transferred the debt to Portfolio Recovery. Only this week (December 13) did I receive a debt validation letter from Portfolio Recovery- in other words, more than a month after their first contact on November 9.

This seems to me to be a very clear violation of the FDCPA, which states that "Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice." This is reaffirmed by California state law, which is where I live.

My question is, what it the best way for me to wield this apparent violation to dissuade Portfolio Recovery from further action, or at least from ultimately suing me? (And yes, I have saved the voicemails, with date stamps, so I have documentation). I assume I should include it in my response to the Validation letter-- anyone have thoughts on the specific language? And if it does come to a lawsuit, would this likely be sufficient for a dismissal or ruling in my favor?

Many thanks for any advice or thoughts. Happy holidays to all.

How much is the debt?

[cliffordo]

Around 16k.

[BV80]

5 minutes ago, cliffordo said:

Around 16k.

The most you can get for a violation of the FDCPA is $1000.00.  That’s, more than likely, not going to deter Portfolio from pursuing a $16;000.00 debt.

 

[cliffordo]

Got it, thanks. So is it worth bringing up in a response to a notification letter at all?

[BV80]

2 minutes ago, cliffordo said:

Got it, thanks. So is it worth bringing up in a response to a notification letter at all?

If you request validation, keep it simple.  Simply state that you dispute the account in question and demand validation.  You could include the violation, but I don’t know if it would make a difference.  It couldn’t hurt, but I just don’t know if it would help.

You might want to start preparing for a possible lawsuit.  Who is the original creditor? 

[cliffordo]

Thanks, it's Barclays.

[BV80]

8 minutes ago, cliffordo said:

Thanks, it's Barclays.

I believe Barclays has an arbitration provision in the cardmember agreement.  You need the agreement that was in effect the year the account went into default.  You can find it in the archives on the CFPB credit card agreement database.

https://www.consumerfinance.gov/credit-cards/agreements/

Read this thread on arbitration.

https://www.creditinfocenter.com/community/topic/329436-arbitration-overview-and-strategy-2018-most-up-to-date-info/

 

[BackFromTheDebt]

I would always send a DV letter for one simple reason:  that is a low bar to jump over, but occasionally creditors fail to jump over that bar.  That is much less common now, but occasionally it happens, and when it does it is good for you.  
 

There are special laws in California, as well as special arbitration procedures. 
 

It would be a very good idea if you learned as much as possible about these. There are plenty of California threads.  
 

Also, there is the question as to whether you should wait to be sued, or if wait until you are sued.  In general you wait until sued.  There are some situations where you file before being sued.  In a nutshell, is there some reason why a court case would be a bad thing for you?  For example, choice of law and shorter SOLs in arbitration, or if you are or will be in  a profession where you need background checks or security clearance. If so, file before they sue.  

[nobk4me]

16 hours ago, BV80 said:

The most you can get for a violation of the FDCPA is $1000.00.  That’s, more than likely, not going to deter Portfolio from pursuing a $16;000.00 debt.

 

I think in CA a consumer can collect $1K through the state Rosenthal Act as well as the FDCPA statutory damages.

 

[iluv2write]

It sounds like you have a potential case against Portfolio Recovery. One option you can try is to contact an attorney that specializes in FDCPA violations. The attorney will give you a free consultation. If they decide your case is worth pursuing, you won’t have any out of pocket costs and you could potentially have the debt wiped out and/or get up to $1000 in your pocket and your attorney fees paid for by the collection agency.

If the attorney doesn’t take your case, and you end up getting sued, your best option is to file a motion to compel arbitration when you file an answer the lawsuit. A lot of people on here have gotten their cases dismissed this way or at least got really decent settlements with junk debt buyers.

[Clydesmom]

20 hours ago, cliffordo said:

This seems to me to be a very clear violation of the FDCPA, which states that "Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice."

It isn't a clear violation.  Voice mail messages are not communication DIRECT with the consumer.  Had you spoken on the phone to them at the time of either call the 5 day rule would have been triggered.  It is borderline at best.  Given the amount of the debt, up to $2000 in fines doesn't even make a dent in the amount they can be awarded in court.  In these cases even if it is a violation they can simply fire the law firm and force you to pursue them separately for the violation while they continue with a new firm with a lawsuit to collect.

1 hour ago, iluv2write said:

you could potentially have the debt wiped out

The OP said the debt is $16,000.  There is no way a $1,000 FDCPA award will wipe the debt out and PRA isn't the least afraid of the threat.

1 hour ago, iluv2write said:

If the attorney doesn’t take your case, and you end up getting sued, your best option is to file a motion to compel arbitration when you file an answer the lawsuit. A lot of people on here have gotten their cases dismissed this way or at least got really decent settlements with junk debt buyers.

PRA is the one JDB that has gone all the way through to the end for an arbitration award.  They are not put off by it like others.  We consider them the tip of the iceberg of potential JDBs that will eventually follow through on arbitration.

[iluv2write]

On 12/18/2021 at 2:42 PM, Clydesmom said:

The OP said the debt is $16,000.  There is no way a $1,000 FDCPA award will wipe the debt out and PRA isn't the least afraid of the threat.

PRA is the one JDB that has gone all the way through to the end for an arbitration award.  They are not put off by it like others.  We consider them the tip of the iceberg of potential JDBs that will eventually follow through on arbitration.

I really think it would be worth it for the OP to at least consult with an attorney. The attorney may figure out additional violations of PRA that the OP didn’t think of.

There’s no guarantee the OP will have the same success as other posters, but I believe compelling arbitration will be the best chance for the OP to have a good outcome. I know this from recent personal experience. I am trying to help the OP but it seems you disagree with me. What do you recommend for the OP? 

That’s interesting that you say that PRA followed through all the way through for an arbitration award. Where did you hear about this? Was it from a poster on this forum? What was the outcome?

I think it’s too early to say that other JDBs are going to go follow suit and follow through with arbitration. They are likely going to stay the course and profit from the 95 percent plus that give them default judgements and not spend too much money the very few people that fight them. OP said the debt was $16,000, however PRA probably paid like $800 for it. It’s not going to be worth it for a JDB to spend thousands of dollars to chase after money they may or may NOT get, when they can get easy money through default judgements.

[Clydesmom]

37 minutes ago, iluv2write said:

The attorney may figure out additional violations of PRA that the OP didn’t think of.

You clearly do not understand the FDCPA.  The violations would be combined and still only eligible for $1000.  The consult with a good consumer attorney would likely be at no charge but I would not get my hopes up given the size of the debt.

39 minutes ago, iluv2write said:

That’s interesting that you say that PRA followed through all the way through for an arbitration award. Where did you hear about this? Was it from a poster on this forum? What was the outcome?

There have been at least 3 on this forum alone where PRA agreed to and followed all the way through on arbitration.  The most prominent thread ended up with an award for PRA including fees because the arbitration demand was deemed frivolous and not in good faith by the arbitrator.  The Defendant ended up filing for bankruptcy after the award was confirmed as a judgment.  I know of another case where Midland has followed through so far as well.

40 minutes ago, iluv2write said:

I think it’s too early to say that other JDBs are going to go follow suit and follow through with arbitration.

I think with your 4 posts you haven't been around long enough to know what is likely to happen.

41 minutes ago, iluv2write said:

OP said the debt was $16,000, however PRA probably paid like $800 for it.

Another common misconception.  The price paid is based on a pool of bad debts not on each debt as a cost.  While it may boil down to pennies on the dollar when the total purchase price is divided among thousands of accounts in the pool it doesn't matter.  Under contract law they are legally entitled to collect on the entire balance of the account and a five figure debt of $16k is just too juicy for PRA to walk away from.  The debt they got the award in and fees was not even that high.

43 minutes ago, iluv2write said:

It’s not going to be worth it for a JDB to spend thousands of dollars to chase after money they may or may NOT get, when they can get easy money through default judgements.

Another misconception.  The threat of arbitration used to be a gold plated guarantee they walk.  Not so much anymore.  We are seeing more and more cases where they hang on until the Defendant settles.  

44 minutes ago, iluv2write said:

I believe compelling arbitration will be the best chance for the OP to have a good outcome.

Assuming they can over come the exclusion in the card agreement preventing arbitration of debts in small claims court.  Since you clearly can't comprehend what I told the OP I will try again:  the courts have the ability to decide for themselves whether or not they are small claims and that clause applies.  There are those here who split hairs down to the hub claiming that literally because it doesn't say "small claims" over the door to the courtroom or the paperwork that it isn't small claims court.  Funny thing is the judges in quite a few felt otherwise and outright said "my court IS SMALL CLAIMS." and ruled against their motion for arbitration.  

47 minutes ago, iluv2write said:

What do you recommend for the OP? 

That they have a solid back up plan in place for how to defend this case if the MTC is denied.  The same thing I said in the first place.

[nobk4me]

14 hours ago, iluv2write said:

That’s interesting that you say that PRA followed through all the way through for an arbitration award. Where did you hear about this? Was it from a poster on this forum? What was the outcome?

Look at the thread by @catlady22

[cliffordo]

Hi all, as the OP I want to thank everyone who took time to respond to my post. I learned a lot, above all that this violation on PRA's part doesn't give me the leverage I hoped. So I'm probably going to go ahead and hire an attorney I've used before (he did a really good job of negotiating a settlement with an OC a couple years ago. Reading the responses, I do have a couple follow-up questions-- 

 1) Given the debt size (18K), is the question most likely not if PRA will sue, but when? I ask because...

 2) My attorney (to be) suggests that instead of waiting for a suit, he contacts the pre-legal department at PRA- he says he'll be able to get me a better settlement that way. Does this jibe with people's experiences?  Of course, this negates the possibility of getting off scot-free if they don't sue, but see 1)

3) Regarding a response letter, attorney said not to bother writing one if the plan is to initiate a pre-legal settlement, since it might prompt them to sue sooner rather than later. So that's contingent on the answers to 1) and 2), but does it make sense? 

4) Regarding the arbitration strategy- the OC (Barclays) did have an AAA clause in place at the time of default. So I *could* try this. But it comes down to whether PRA would be likely to pay the $ to join the arbitration, which seems possible (if not likely?), in which case I would be liable for the total amount, since I don't think I have a substantial defense. So it would be high-risk, albeit high reward if it works. Is that general assessment correct? As a newbie it's pretty complicated so I want to make sure I understand the issues.

5) ballpark figure- what's a reasonable target for a settlement of an 18K debt with PRA? I have no assets (not a home or car owner), very little cash at hand, and am unemployed (though I'm pretty sure I have a job offer that would begin in March, so part of the strategy is to slow-roll the negotiations until I have some $ saved or can at least start installment payments)

Thanks again, and happy new year to all, even the credit collection agencies that I assume lurk on this forum.

[BV80]

On 1/4/2022 at 6:01 PM, cliffordo said:

Hi all, as the OP I want to thank everyone who took time to respond to my post. I learned a lot, above all that this violation on PRA's part doesn't give me the leverage I hoped. So I'm probably going to go ahead and hire an attorney I've used before (he did a really good job of negotiating a settlement with an OC a couple years ago. Reading the responses, I do have a couple follow-up questions-- 

 1) Given the debt size (18K), is the question most likely not if PRA will sue, but when? I ask because...

 2) My attorney (to be) suggests that instead of waiting for a suit, he contacts the pre-legal department at PRA- he says he'll be able to get me a better settlement that way. Does this jibe with people's experiences?  Of course, this negates the possibility of getting off scot-free if they don't sue, but see 1)

3) Regarding a response letter, attorney said not to bother writing one if the plan is to initiate a pre-legal settlement, since it might prompt them to sue sooner rather than later. So that's contingent on the answers to 1) and 2), but does it make sense? 

4) Regarding the arbitration strategy- the OC (Barclays) did have an AAA clause in place at the time of default. So I *could* try this. But it comes down to whether PRA would be likely to pay the $ to join the arbitration, which seems possible (if not likely?), in which case I would be liable for the total amount, since I don't think I have a substantial defense. So it would be high-risk, albeit high reward if it works. Is that general assessment correct? As a newbie it's pretty complicated so I want to make sure I understand the issues.

5) ballpark figure- what's a reasonable target for a settlement of an 18K debt with PRA? I have no assets (not a home or car owner), very little cash at hand, and am unemployed (though I'm pretty sure I have a job offer that would begin in March, so part of the strategy is to slow-roll the negotiations until I have some $ saved or can at least start installment payments)

Thanks again, and happy new year to all, even the credit collection agencies that I assume lurk on this forum.

There’s no way of knowing if PRA will sue.  Odds are that it will file a lawsuit, but we still can’t say for sure because we can’t see into the future.  Arbitration works well most of the time in that it causes debt buyers to drop lawsuits.  However, Portfolio did agree to arbitrate a claim at least once with a consumer on this site.  I don’t know if that was just a fluke, or if it may be becoming common practice for that debt buyer.  

Settling before a possible lawsuit is, of course, the best way to avoid being sued.  In my opinion, one’s decision is based upon his or her own personal issues.

How much time do you have to research your state laws and court rulings?  CA has some specific laws by which debt buyers must abide.  Your state also has specific court rules that sometimes tend to derail debt buyer plaintiffs.  From what I understand, most debt buyer lawsuits are filed in limited civil court.  One of the rules in that court is CCP 98.  Ask the “attorney-to-be” about CCP 98 and the CA Supreme Court ruling regarding that rule in Meza v. Portfolio Recovery Associates, LLC (2019).  Does the attorney even know about that rule and court ruling?

https://scholar.google.com/scholar_case?case=10912338867560789346&q=“procedure+98”&hl=en&as_sdt=4,5

It seems that the CCP 98 requirement that witnesses such as affiants (those who attest to facts in affidavits) be present at a location within 150-miles of the court to be available for personal service of a subpoena to appear in court causes problems for debt buyers and their employee witnesses.  Do a search for CCP 98 on this site.  

The point is that you must be willing to put in the time and effort to launch a proper defense.  If you just want the problem over and done with, the best way to accomplish that goal is to settle.  How much PRA will settle for is also impossible to predict.   30% to 40% is probably a good guess.  

 

 

[BackFromTheDebt]

There are two factors here:

1. Is settlement you best option, and if so,

2. When is the best time to settle?

 

The answer lies in what your level of comfort.  If PRA sues, you can go into arbitration.  The question is, will they follow with that large an amount.  We have a definite "MAYBE" here.  Usually they don't follow, but sometimes they do.  

 

You have to realize, companies will often institute a "policy".  The policy may or may not make sense, and it may hurt the company.  But anyone who violates the policy could lose his/her job.  In the old days the policy of PRA was to NOT follow cases into arbitration.  If the policy changes to always following, or even following for large amounts, you will be sunk.

 

The second question is when is the best time to settle.  

Settling BEFORE a lawsuit will usually get a better settlement than after the suit is file.

 

If a suit is filed, getting arbitration usually gets you into a better settlement situation.  The two best times to work out a settlement are:

A. Between the time you file and when they pay their first bill

B. Much later on, between the time they get the bill before the final hearing and when they pay that bill.  

 

For the record, I have settled in both of those situations.  

Another settlement was after I showed their attorney evidence that really hurt the creditor's case.  That is another story, but I have found from experience that having real violations greatly enhanced my negotiating position.