Portfolio Recovery Was Found Liable For Malicious Prosecution And For Violating The Fair Debt Collection Practices Act

 

A jury in Missouri recently awarded $251,000 in damages to Maria Guadalupe Mejia Alcantara, who was wrongfully sued by a debt collector, Portfolio Recovery. The jury also awarded her an additional $82.99 million in punitive damages assessed against the collection company.

It all started several years ago, when Portfolio Recovery Associates claimed the Kansas City, MO, resident owed $1,130.14 in credit card debt.

Only problem was Alcantara didn’t owe this debt. 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.

A legal aid lawyer spent months trying to convince Portfolio Recovery of its error, but the company continued to harass the woman trying to collect the bogus debt.

And so when the debt collector sued Alcantara, she filed a counterclaim, alleging malicious prosecution and violation of the Fair Debt Collection Practices Act.

A judge sided with Alcantara when he ruled 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 Alcantara. “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 laid down the hammer on Portfolio Recovery. The $252,000 was awarded to Alcantara 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 Alcantara and her attorney,  Gina Chiala would receive half while the other half would go to the Missouri AG’s office to set up a victims’ compensation fund. The state’s AG’s office has reportedly received 88 similar complaints about Portfolio Recovery since 2006.

The Alcantara’s lawyer says the jury hit Portfolio Recovery with a “verdict that it thought would get this company’s attention.”

Gina Chiala told KCUR,  “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. 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 verdict and told the Kansas City Star, “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. 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.”

Also see: I Don’t Hang Up On Bill Collectors, They Hang Up On Me!

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