A jury in Missouri has ordered Portfolio Recovery Associates (PRA) to pay Maria Mejia almost $83 million for violations of the Fair Debt Collection Practices Act (FDCPA) and for malicious prosecution. The majority of the award is based on punitive damages stemming from PRA’s malicious prosecution of Mejia, coming in at $82,990,000.00. She was also awarded actual damages under the FDCPA of $250,000.00.
This type of damages award is not typical of FDCPA cases, because the FDCPA does not allow for punitive damages. However, it does indicate the sometimes powerful nature of state consumer protection statutes, many of which do allow consumers to recover punitive damages. PRA has already announced that it plans to request that the judge adjust the punitive damages award. Generally, punitive damages need to be proportional to the actual damages awarded. Even if the punitive damages are reduced, PRA will likely still owe Mejia a substantial sum of money. After all, it was attempting to collect a debt that Mejia did not owe. Instead, the debt was owed by a man living in Kansas City.
PRA pursued its baseless lawsuit against Mejia for 15 months, which she says terrified her.
While it’s normal to be afraid when being sued, it’s very important that you do not ignore a lawsuit. In Illinois, a judgment collects interest at a rate of 9%—more than twice the current rate for a 30-year fixed-rate home mortgage. It's important to protect your rights when dealing with debt collectors.
For example, you should always request verification of the debt when a debt collector contacts you. Under the FDCPA, the collector must provide you verification of the debt if you request it. Additionally, debt collectors must identify themselves as debt collectors. If you receive a phone call from a debt collector, he or she must inform you that the call is to collect a debt, and that any information obtained will be used to collect the debt. Failing to do so (or doing it in the middle of a long phone call) is an FDCPA violation.
Federal and state consumer statutes provide a broad range of protection to consumers. It is important to know your rights as well as to protect them. If you think that your rights may have been violated, or if you are simply unsure how to deal with a debt collection lawsuit, then you should consult with a competent consumer defense attorney.