PRA and LVNV Funding Vacate $16 Million in NY Judgments

[ICANHASMUNY?]

http://www.businessw...ot-y-dot-accord

Quote

Two of the largest U.S. consumer debt buyers agreed to drop collections on about $16 million to settle allegations they pursued debtors in violation of New York law, an accord reached as federal regulators prepare to crack down on the growing industry.

Portfolio Recovery Associates (PRAA:US) LLC, based in Norfolk, Virginia, and Sherman Financial Group LLC also agreed to pay a combined $475,000 in penalties, Attorney General Eric Schneiderman said today. The firms, which buy mostly unpaid credit card debt at discounted prices and then get court judgments on the defaults, broke New York law by trying to collect obligations that were too old, the state said.

 

 

this all Ties back to PRA v King , a state appeals court ruling citing the NY Borrowing Statute.

Even though NY has a 6 year SOL, they apply the lenders home state Statute of Limitations to the account, because that is where the economic injury occured,

http://www.ag.ny.gov...s-unlawful-debt

Quote

 

It is unlawful for a debt collector to bring suit against a consumer when the claims are outside of the applicable statute of limitations, the time frame established for the enforcement of legal rights. Under New York’s longstanding “borrowing statute,” in order for an action to be timely filed in this state, it must be commenced not only within New York’s own statute of limitations, but also within the statute of limitations of the state where the cause of action accrued (if other than New York). In debt collection actions, a cause of action accrues where the original creditor of the debt resides. For example, while New York’s statute of limitations to collect on a debt is generally six years, if the original creditor on the debt was located in Delaware, which has a three-year statute of limitations, the shorter statute of limitations would govern the action.

------

 

Under the settlements announced today, Portfolio Recovery Associates and Sherman Financial Group will seek to vacate these improper judgments with the courts and will immediately cease any further collection efforts on the judgments. Based on information provided by the companies, the combined outstanding balance on the judgments being vacated is more than $16 million. In addition, the two companies have agreed to several important enhancements to their current practices in New York to help safeguard consumers against any further potentially deceptive or confusing debt collection practices relating to old debts, including:

Disclosing in any written or oral communication with a consumer about a debt that is outside the statute of limitations that the company will not sue to collect on the debt.

Disclosing in any written or oral communication with a consumer about a debt that is outside the date for reporting the debt provided for by the federal Fair Credit Reporting Act that, because of the age of the debt, the company will not report the debt to any credit reporting agency.

Alleging certain information relevant to the statute of limitations in any debt collection complaint filed by the company, such as the name of the original creditor of the debt, the complete chain of title of the debt, and the date of the consumer’s last payment on the debt.

Submitting an affidavit with any application for a default judgment specific to the statute of limitations that, among other things, attests that after reasonable inquiry, the company or its counsel has reason to believe that the applicable statute of limitations has not expired.

In addition, Portfolio Recovery Associates and Sherman Financial Group will pay $300,000 and $175,000, respectively, to the state as civil penalties and costs.

 

Sherman Financial group is AKA; LVNV Funding, PYOD, Resurgent Capital Services.

$16 Million in Judgments, $475K fine.

[JunkBuyersWorstNightmare]

Couldn't happen to a nice bunch.

 

It sounds as if NYS is now being interpreted as a de facto State of Repose.

[ICANHASMUNY?]

Couldn't happen to a nice bunch.

 

It sounds as if NYS is now being interpreted as a de facto State of Repose.

 

They can still attempt to collect, but they must inform the consumer that it's beyond the SOL.

 

The real question is, whether the Collection agencies that are Hired by either of them will tell the consumer this over the phone. on the first call.

 

if the CA's don't - that could end up as a CFPB complaint against PRA and Resurgent Capital services because they are supposed to " supervise " the CA's they hire, and make sure they are not violating the FDCPA.

[SRQ]

This is pretty sickening. And no one is outraged. No one gets outraged anymore.

[mizliz1011]

Ok, salamander child found out about this one week after she paid off Discover, whose attorney did NOT inform me about this. Am I entitled to recover if it was a payment vs. a judgement? They were in court with me threatening judgment...they had filed suit ...without a judgement, am I entitled to recover if they did not inform me?

[ICANHASMUNY?]

Ok, salamander child found out about this one week after she paid off Discover, whose attorney did NOT inform me about this. Am I entitled to recover if it was a payment vs. a judgement? They were in court with me threatening judgment...they had filed suit ...without a judgement, am I entitled to recover if they did not inform me?

possibly , there is some case law floating about where an attorney had to reimburse the consumer..... you should start a new thread on this.