By Simón Rios, WBUR Staff | November 11, 2019
Attorney General Maura Healey’s office has reached a multimillion-dollar settlement with a debt collection firm she said was illegally targeting the elderly, people with disabilities and others whose income is exempt from debt collection liabilities.
Portfolio Recovery Assets “lied to consumers,” Healey said. “It knew that they were on Social Security, it knew that they were receiving disability, and instead of not collecting on this, [the company] pressured these folks into paying these debts, using that exempt income, using their Social Security money, their disability money.
“That’s a problem.”
The Delaware-based firm does not admit to any violations charged under the Consumer Protection Act, court documents show. But it agreed to pay out $4 million that will go to thousands of consumers who officials say were subject to the company’s collection practices.
While it is legal to collect on debt, Healey said “aggressive pressuring and intimidating of consumers” is not. Healey said the company tried to collect on debts that were so old they were unenforceable, and failed to inform consumers that Social Security and disability benefits, as well as pension income and child support, can be exempt from having to pay debt collectors.
Portfolio said in a statement that it has has fully cooperated with the Healey’s office.
“We deny that [Portfolio’s] practices violate Massachusetts or federal law, along with any notion that we targeted vulnerable customers,” Kevin Stevenson, the company’s president and chief executive officer, said in the statement. “While we were both surprised and disappointed to see some of the Attorney General’s public comments and characterizations of this matter, we are pleased that we have reached an agreement that provides for enhanced communication and disclosures with our customers.”
Under the settlement, Portfolio Recovery Assets agrees to stop targeting people whose only income is exempt from debt collection. The company also agreed it won’t try to collect if it can’t prove a debt is valid.
Julia Jones of Boston said Portfolio Recovery Assets came after her for less than $1,000, and when the company couldn’t document the original source of the debt, she turned to the attorney general.
Jones said having debt collectors coming after you is like having a weight around your neck.
“It’s hard to have limited resources in the first place, but then when you get these constant reminders [that] you’re no good … it kind of erodes your dignity,” Jones said.
Healey said she hopes other companies engaging in questionable collection practices will take the settlement as a warning.
“Hopefully today we make clear, and maybe that will reduce bad behavior, that we are going to come after you if you engage in abusive debt collection in the state,” Healey said.
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