Court Rules in Favor of Consumers in a Class Action Suit Against Portfolio Recover Associates, LLC

In a class action suit against Portfolio Recovery Associates, Piggy _banka
consumer rights firms wins a $350,000 judgment against the
collection agency for violations of the
Fair Debt Collection Practices Act
(“FDCPA”).  In the case
of Zimmerman v
Portfolio Recovery Associates, LLC
, a plaintiff sued the debt
collector for sending a
collection letter
inferring he was being sued for collection of
the debt.  U.S. District Court, Southern District of New York,
09 Civ. 4602 (PGG).  Specifically,
Portfolio Recovery
sent 990 collection letters to alleged
debtors implying legal action was being taken against them. 
These collection letters were titled “Pre-Suit Package” and were
signed by a “Catherine M. Hedgeman, Esq.” and enclosed a draft
summons and complaint.  In his complaint, the plaintiff
alleged Portfolio Recovery violated the
by misrepresenting legal action was being taken against
him in an effort to collect the debt when in fact such was not the
In the Order issued by the Southern District of New York, the
court stated that
Portfolio Recovery Associates
‘ use of the Pre-Suit Package was
exactly the type of conduct the FDCPA seeks to prevent, justifying
a large financial reward for the consumers.  The court further
went on to say that because the collector had a net worth in excess
of $50 million, the penalty must be large enough to deter the
collection agency from further engaging in this type of

The $350,000 judgment is the largest reported judgment on record
in this type of class action suit.  The court stated the
reason behind such a large reward was based on “the frequency and
persistence of noncompliance by the debt collector, the nature of
such noncompliance, the resources of the debt collector, the number
of persons adversely affected, and the extent to which the debt
collector’s noncompliance was intentional.”

In conclusion, the court further determined that with the money
awarded from the judgment, the class representative would receive
$1500, each class member would receive $500 and any remaining
balance would be donated to a not-for-profit organization seeking
to protect consumers from
abusive debt collection tactics
and/or working to increase
consumer awareness of their rights under the law. 

If you feel your rights have been violated under the FDCPA,
contact SmithMarco P.C. for a free case review.