Collector’s Mistake Leads to Huge Settlement

debt

Erasing Debt

Plenty of people in debt receive, what may seem like harassing calls, on a daily basis from aggressive debt collectors.  When do these calls cross the line? What if you were receiving these calls and you knew you were not in debt? What if the collection company took it a step further by filing suit? This is what happened to a Maria Guadalupe Mejia, a woman from Missouri, who was mistakenly sued by PortfolioRecovery Associates LLC. Mejia was sued for a credit card debt of $1,000, which in turn belonged to a man with a similar sounding name. A jury decided that Portfolio Recovery Associates LLC ‘maliciously prosecuted’ Mejia to collect a debt that was not her own and awarded her $83 million.

Before the lawsuit was filed against Maria Mejia, she worked in a dry cleaner’s shop which recently closed leaving her unemployed. Portfolio Recovery Associates LLC pursued Mejia for the debt of $1,000 for 15 months after she received the first notice despite her constant argument that it was not her debt. In a written statement to KCUR, Mejia said, “The lawsuit terrified me.”  One of Mejia lawyers, Gina Chiala, stated “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 Associates LLC claims they dropped the lawsuit against Maria for the credit card debt when the supposedly realized the mistake, but this action was taken after Chiala’s law firm filed a countersuit.

After five days of hearing evidence, the jury determined a $250,000 fine for violation of the Fair Debt Collection Practices Act and punitive damages of $82,990,000 for the malicious prosecution of Mejia. A spokesperson for Portfolio Recovery Associates, Michael McKeon called the verdict “outlandish” and said it “defied all common sense.” McKeon said the company will file motions to dismiss the award. They believe it to be of an “inappropriate” size reward and that if the verdict is not reduced it could have an adverse effect on the Company’s financial condition and/or operations. All in all the punitive award to Mejia amounts to nearly half of the 2014 net income figure of PRA Group, Inc., which owns The Portfolio Recovery Associates, which shows a mistake can go a long way.

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