Lawsuit: PRA Failed to Disclose Consequences of Time-Barred Debt Payment

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A proposed class action has been filed against Portfolio Recovery Associates, LLC (PRA) claiming the debt collector failed to inform a consumer that any partial payment on her time-barred debt would renew its statute of limitations. According to the complaint, the defendant sent the plaintiff a collection letter admitting that her debt was unenforceable because of its age and wouldn’t be collected through litigation. The case alleges, however, that the letter unlawfully failed to mention that if the plaintiff submitted a partial payment, the debt’s statute of limitations would be renewed and she would lose the aforementioned protections. Adding to the supposed infraction, the defendant allegedly encouraged the plaintiff to make payments by including several settlement offers in the letter while informing the woman that her “first payment must be received by 04/06/2018.” 

“Although it is not improper for a debt collector to seek re-payment of time-barred debts, the debt collector must take caution with the language it uses in its communications that seek to collect such debts,” the complaint states. “The FTC requires debt collectors, including debt buyers, to make disclosures to prevent deception in collecting on time-barred debts.”