Large verdict awarded for malicious debt collection

A jury in Missouri awarded a woman nearly $83 Million Dollars for malicious prosecution, and violations of the Fair Debt Collection Practices Act.

The jury found that Portfolio Recovery Associates had maliciously sued her for a credit card bill she didn’t owe. The bill was actually owed by someone with a similar name.

Verdicts like this rarely stand up on appeal: a Judge will undoubtedly reduce the verdict to a more reasonable amount. The result will still be good news for victims of abusive collection tactics.

This case illustrate the problems that can arise with companies, such as Portfolio Recovery, which buy credit card and other accounts from banks, which have written them off. Typically, the collection company receives only a bare minimum amount of data to support their claim.

In order to win a lawsuit, a Debt Collection Company should have evidence that the debt was validly created, and that the amount claimed is correct – with some indication of how this amount was calculated (how much is principle, interest, late fees, etc.). They must also prove that the debt has been validly assigned to them, and that the suit has been brought within the allowable time period, known as the statute of limitations. This time period varies from state to state. In Pennsylvania, for credit card debts, the time limit is four years. The time begins on the date of the last payment, or charge to the account, and ends on the day that a lawsuit is first filed.

If you have been served with a lawsuit, or are the victim of improper collection tactics, you should consult a debt collection attorney.

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