Debt Collector Defies Penalties, Launches Thousands of Lawsuits in Arizona

One of the largest debt collection firms, Portfolio Recovery Associates (PRA), is in the spotlight for its aggressive litigation practices in Maricopa County, having filed over 20,000 lawsuits since 2022 despite facing penalties for violating consumer rights.

Among those affected is Anne Munoz, a retired school bus driver from Arizona, who was blindsided when she received a lawsuit from PRA last September. The suit pertains to a purported debt of over $2,700 for a Dell Financial Services account supposedly linked to Munoz from 2011. “This came out of the blue,” she stated, asserting, “It’s not my debt.”

PRA, a publicly traded company on NASDAQ, has established a model focused on acquiring “uncollectable” debts for minimal amounts and subsequently pursuing full payment through litigation. In 2023 alone, the company amassed debts worth $1.2 billion, reflecting a 36% increase from the previous year, per statements from its CEO, Vikram Atal.

While Munoz believes she settled her debt from a Dell laptop purchase in 2011, inefficiencies in record-keeping have complicated her situation. Attempts to retrieve documentation from Dell proved fruitless. Moreover, Munoz discovered that another individual with a similar name from a different state, Anne K. Munoz of Missouri, was also targeted for the same debt.

This lawsuit is not an isolated incident; PRA’s actions in Arizona have raised alarms among consumer advocates. Jason Pikler, a senior attorney at the North Carolina Justice Center, remarked on the troubling patterns observed when individuals fail to respond to these lawsuits, resulting in default judgments that can lead to wage garnishments.

PRA’s aggressive push in the courts has yielded significant impacts. In Maricopa County, the firm has filed over 21,000 unique lawsuits seeking a combined total of $47 million. Notably, the average claim per lawsuit hovers around $2,200, pointing toward a trend of pursuing smaller debts that may incorporate a substantial emotional and financial toll on consumers.

In 2023, the Consumer Financial Protection Bureau (CFPB) took action against PRA, penalizing the debt collector more than $24 million for unethical practices, including filing suits without proper documentation. The CFPB labeled these actions as persistent violations, echoing a history of similar fines dating back to a 2015 order urging improvements in operations.

As Munoz gears up for her court date in mid-January, she emphasizes the importance of awareness and action for others facing similar battles. “Other people need to know how to fight them,” she said, advocating for better consumer protections against such aggressive debt collection tactics.

For those receiving lawsuits from PRA or similar organizations, legal experts stress the urgency of responding and seeking assistance. Various legal service organizations in Arizona offer free or low-cost support to help individuals navigate the complexities of debt collection issues.

The situation highlights the urgent need for legislative action to implement protective measures for consumers caught in the crosshairs of aggressive debt collection practices.