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Need Advice - Collection

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I received a collection letter from Rausch Sturm on behalf of Portfolio Recovery for an old credit card debt (~$2K). Last pmt made in 2012. Fell off reports over a year ago. Can they successfully sue? I'm in TX, if that matters. Thanks much for any info. 

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12 minutes ago, cleverpronoun said:

I received a collection letter from Rausch Sturm on behalf of Portfolio Recovery for an old credit card debt (~$2K). Last pmt made in 2012. Fell off reports over a year ago. Can they successfully sue? I'm in TX, if that matters. Thanks much for any info. 

They could sue, but if you raise the statute of limitations as an affirmative defense, they would not be successful.  In addition, you’d have a violation of the FDCPA for filing suit on a time-barred debt. 

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Thank you. Should I contact them or wait to see if they send anything else? Does them taking over the debt re-set the SOL or are they bound to the original SOL? Thanks again.

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31 minutes ago, cleverpronoun said:

I received a collection letter from Rausch Sturm on behalf of Portfolio Recovery for an old credit card debt (~$2K). Last pmt made in 2012. Fell off reports over a year ago. Can they successfully sue? I'm in TX, if that matters. Thanks much for any info. 

Successfully?  Not if you filed a timely response that cites the expiry of the Statute of Limitations as found in the TxCPRC.  This SHOULD be qualified with a presumption that you have been in Texas for more than one calendar year.  If you are a recent import, then other guidelines could enter the equation...

 

If the matter truly has a DOFMD in 2012, then it is ALSO too old to report.  I would put together a specific letter that included the FOAD language but also preserved your rights under the Texas Finance Code...the specificity lays the groundwork for action under the Texas Deceptive Trade Practices Act if they got stupid...and the DCPA is where treble damages come into play...

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This is great information, Centex. Thank you very much. I have been in TX for years, so I'm good to go there. I just noticed that the last four digits of the original acct # shows on their letter but on the credit report, all BUT the last four digits show. Also, the dollar amts don't match exactly. I am assuming it is the same account, tho. The letter also doesn't include the usual verbiage about the debt being too old to report or sue for, which was disturbing. 

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5 hours ago, cleverpronoun said:

This is great information, Centex. Thank you very much. I have been in TX for years, so I'm good to go there. I just noticed that the last four digits of the original acct # shows on their letter but on the credit report, all BUT the last four digits show. Also, the dollar amts don't match exactly. I am assuming it is the same account, tho. The letter also doesn't include the usual verbiage about the debt being too old to report or sue for, which was disturbing. 

 

This is a blatant violation of their Consent Decree with the CFPB, executed in 2015.  See the links below.  Given the age of your debt and DOFD, I would be willing to bet cash money that your account falls into one of the many categories of debts/accounts that the Consent Decree specifically bars them from pursuing future collection activities. You should cite the 2015 consent decree in your correspondence to them and copy the CFPB on the letter.

 

  • Reform collection of older debts: Encore and Portfolio Recovery Associates are prohibited from suing or threatening to sue to collect on time-barred debt. They also cannot collect on such debt unless they disclose to consumers that they can’t sue to collect it.

https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes-action-against-the-two-largest-debt-buyers-for-using-deceptive-tactics-to-collect-bad-debts/

 

https://www.consumerfinance.gov/policy-compliance/enforcement/actions/portfolio-recovery-associates/ 

 

 

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You should just sue the pants off them. They'll pay you off so they don't have to explain themselves to a judge. If you want a lawyer, call Jerry Jarzombek. He is in TX and is one of the best in the country.

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10 hours ago, Burdell said:

 

This is a blatant violation of their Consent Decree with the CFPB, executed in 2015.  See the links below.  Given the age of your debt and DOFD, I would be willing to bet cash money that your account falls into one of the many categories of debts/accounts that the Consent Decree specifically bars them from pursuing future collection activities. You should cite the 2015 consent decree in your correspondence to them and copy the CFPB on the letter.

 

  • Reform collection of older debts: Encore and Portfolio Recovery Associates are prohibited from suing or threatening to sue to collect on time-barred debt. They also cannot collect on such debt unless they disclose to consumers that they can’t sue to collect it.

https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes-action-against-the-two-largest-debt-buyers-for-using-deceptive-tactics-to-collect-bad-debts/

 

https://www.consumerfinance.gov/policy-compliance/enforcement/actions/portfolio-recovery-associates/ 

 

 

BUT...OP did not receive notice from PRA.  It is an entity NOT named PRA.  Thus, there would have to be a showing made that the Consent Decree had an imputed notice to any agent acting on paper owned by PRA.  I could easily envision counsel for PRA burying counsel for the OP in paper to run costs up such that OP failed to make a recovery on litigation...

 

And to pre-empt...just because a Court MAY award costs to a successful litigant does not mean that they will ALWAYS do so.  Further, there are not that many attorneys in Texas who are going to take such a case on contingency, which would ALSO mean that OP is then tasked with fronting costs or, alternately, learning enough law to go it alone.

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13 hours ago, centex said:

BUT...OP did not receive notice from PRA.  It is an entity NOT named PRA.  Thus, there would have to be a showing made that the Consent Decree had an imputed notice to any agent acting on paper owned by PRA.  I could easily envision counsel for PRA burying counsel for the OP in paper to run costs up such that OP failed to make a recovery on litigation...

 

And to pre-empt...just because a Court MAY award costs to a successful litigant does not mean that they will ALWAYS do so.  Further, there are not that many attorneys in Texas who are going to take such a case on contingency, which would ALSO mean that OP is then tasked with fronting costs or, alternately, learning enough law to go it alone.

Yeah, I'm not sure it would be worth the expense and trouble of the OP pursuing action against PRA, so I didn't suggest that.  I just recommended they cite the consent decree in their response and copy the CFPB.  They should probably also copy PRA corporate law department.

 

Nevertheless, Rausch Sturm has been engaged by PRA to collect on this debt on behalf of PRA, and they are doing so in violation of the CD. And don't tell me they don't know what they're doing is wrong.  This could have serious consequences for PRA and for the RS attorneys involved. Who knows how many violations like this PRA and/or its legal henchmen are committing?  This is why it is important to notify the CFPB.  I think they ought to be hauled before the federal judge who presided over the CD and charged with contempt of court.

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On further reflection, I now think the OP should at least contact Mr. Jarzombek mentioned above and see if he'll take the case on contingency. I wouldn't be surprised if he accepted -- this case seems like a slam dunk.  The OP should sue the pants off them.

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10 hours ago, Burdell said:

On further reflection, I now think the OP should at least contact Mr. Jarzombek mentioned above and see if he'll take the case on contingency. I wouldn't be surprised if he accepted -- this case seems like a slam dunk.  The OP should sue the pants off them.

The problem with your slam dunk theory is the consent decree does not have a right of private action.  That decree is the result of their settlement with the CFPB.  Private citizens are not a direct party to the violations they merely benefit from PRA following through.  If PRA did violate the settlement the recourse is to make another complaint to the CFPB and hope that enough consumers have done so that the agency re-opens the issue.  

 

Anecdotally we have not seen pro-se claims of the decree supporting their collection case defenses and while I have not done a deep dive on the courts I don't see any cases with that basis being filed by consumer attorneys either.  

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Oh, I think PRA and RS would pay a hefty sum to prevent the OP from making a lot of noise about this matter and getting them back on the radar of the CFPB and DOJ.

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Violation of a consent decree goes towards proving a repeat pattern of violating consumer rights. It would be foundational in an unfair trade practices claim, even tho you cannot be awarded damages per se. It would be like proving someone was drunk when they hit your car; it establishes liability even though the state is the only one who can exact punishment.

 

If there was an arbitration clause in the original contract, you could use that as well. Arb clauses generally have no expiration date. Either way, it looks like it's time for PRA to get out the checkbook.

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3 hours ago, legaleagle2012 said:

Violation of a consent decree goes towards proving a repeat pattern of violating consumer rights. It would be foundational in an unfair trade practices claim, even tho you cannot be awarded damages per se. It would be like proving someone was drunk when they hit your car; it establishes liability even though the state is the only one who can exact punishment.

 

If there was an arbitration clause in the original contract, you could use that as well. Arb clauses generally have no expiration date. Either way, it looks like it's time for PRA to get out the checkbook.

PRA did not send the letter.  Rausch Sturm sent the letter. 

 

That simple fact is the monkey wrench in what too many here are claiming to be a 'slam dunk.'

 

If I was counsel for PRA, I would say 'bring it' and then urge sanctions, to include fees, when I got the case tossed...

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I want to emphasize that the consent decree has the force of law, and it is federally enforceable.  PRA and/or their agents (i.e., RS) are legally prohibited from attempting to collect on this debt, and the method of collection they are employing is likewise illegal under the consent decree.  That is actionable.  And I will add that the minute they put a stamp on that collection letter and deposited it into the mailbox, they committed mail fraud, another felony.

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PRA is a corporation, they have to be represented by counsel in all venues I have seen. I don't think they have in house counsel for court cases. They cannot escape violations of  the law (or consent decree) by hiring somebody to do it for them.  Nothing in law is a slam dunk, these guys will put up some token resistance, but if you have a solid case, good legal skills, and can draft a complaint properly, they will fold.

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