Encore, PRA Reach Settlement with the CFPB, Agree to Hefty Fines

The CFPB announced today that it has taken action against two of the biggest debt buyers in the U.S., Encore Capital Group and Portfolio Recovery Associates (PRA). The Bureau cited both buyers for what it termed illegal debt collection activities, including purchasing debts they should have known were inaccurate and/or not legally enforceable and attempting to collect on that debt through unlawful means.

“Encore and Portfolio Recovery Associates threatened and deceived consumers to collect on debts they should have known were inaccurate or had other problems,” said CFPB Director Richard Cordray. “Now, the two biggest debt buyers in the market must refund millions and overhaul their practices. We will continue to take action to protect consumers from illegal and obnoxious debt collection practices.”

The Bureau ordered Encore to refund customers up to $42M, to stop efforts to collect on $125M in debts and to pay a $10M penalty. PRA is on the hook for $19M in refunds, must stop collections on $3M in debts and pay an $8M penalty.

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