It all started several years back, when Portfolio Recovery Associates claimed a Kansas City, MO, resident owed $1,130.14 in credit card debt.
But she didn’t owe this debt — in fact, it belonged to a man who lived in the other Kansas City (the one in Kansas). Like many debt collectors, Portfolio lacked the proper documentation for the debt it purchased but pursued it anyway.
“The lawsuit terrified me,” she told KCUR FM in a written statement. “I feared they would take my house and I feared they would arrest me.”
A legal aid lawyer spent months trying to convince Portfolio Recovery of its error, but the company continued to attempt to collect the bogus debt.
And so when the debt collector sued the woman, she filed a counterclaim, alleging malicious prosecution and violation of the Fair Debt Collection Practices Act.
A judge sided with the woman last October, ruling that the debt collector had “acted in bad faith, abused the discovery process and repeatedly violated this court’s discovery orders.”
“I was very shocked that they sued me for one year and three months even though I never had the credit card,” says the woman. “And after they dismissed the case, they said they might sue me again.”
A jury was subsequently asked to make a decision on damages, and last week they came down hard on Portfolio Recovery. The $252,000 was awarded to the woman for the company’s violations of the FDCPA, while the $82.9 million was for malicious prosecution. That figure represents around half of the company’s net income for 2014.
If that verdict is upheld, the woman (and her attorneys) would receive half while the other half would go to the Missouri attorney general’s office to set up a victims’ compensation fund. The state’s AG’s office has reportedly received dozens of similar complaints about Portfolio Recovery in the last decade.
The woman’s lawyer says the jury hit Portfolio Recovery with a “verdict that it thought would get this company’s attention.”
“This company has gained a reputation for take no prisoners, ‘If you mess with us we’re going to take you all the way, you’re going to have to spend a lot of money on this litigation, you’re going to have to go all the way to trial,’” said her attorney. “And so, among consumer lawyers, they are known to be very aggressive in litigation and to not stop; even when they’re wrong, they’re just not going to stop.”
Portfolio Recovery says it will appeal the “outlandish” verdict.
“We hope and expect the judge will set aside this inappropriate award, and we plan to file motions to make the request formally in the very near term,” says the company. “Any fair reading of the facts of this case makes plain that a verdict of this size is not justice by any means and cannot stand.”