George Cooley says the debt collectors have been after him for years, despite the fact that he lives on Social Security disability and just $1,300 a month.
Cooley, 66, has been making debt payments of $15 a month - all he could afford - for old debts that he just now found out companies should not have even been going after him for.
“It’s crazy,” said Cooley, who uses a wheelchair to get around and resides in Springfield, in housing for people with disabilities. “You’re living off $1,300 a month. It’s impossible to come up with the money to pay these folks. I wish to heck I could.”
Cooley is one of thousands of people who are being helped by the Massachusetts Attorney General’s office, which negotiated a $4 million settlement with one of the country’s largest debt collection companies.
The attorney general’s office said the company, Virginia-based Portfolio Recovery Associates LLC, used “deceptive and unfair debt collection practices," including trying to collect debts the company couldn’t prove were owed.
The debts Portfolio is after from Cooley are eight and nine years old, meaning they are beyond the statute of limitations, according to the attorney general’s office.
Despite help from the attorney general’s office, debt collectors are still after him, said Cooley, who spent 24 years as a school bus driver in Springfield.
“Hopefully [the attorney general’s office] can handle it all and we can stop this," Cooley said. "People get injured or whatever the case may be, sick. It’s not their fault. It just happens. And that’s where I’m at ... I’m only one of thousands.
Portfolio purchases defaulted loans, credit card accounts, car loans and other debts from creditors at a deep discount and “aggressively” collected debts from consumers with repeated letters and phone calls. The company also used law firms to take financially destitute consumers to court, according to a statement from the attorney general’s office.
As a result of the attorney general’s settlement, Portfolio has agreed to stop collecting certain debts and change its business practices, the statement said.
“This major national debt buyer systematically and repeatedly broke our laws, lied to vulnerable consumers with exempt income, and collected debts they couldn’t even prove were owed,” Massachusetts Attorney General Maura Healey said. “This significant settlement will allow us to put money back into the pockets of thousands of Massachusetts families who were subject to this company’s illegal practices.”
In its settlement, the attorney general’s office claims that Portfolio violated the state’s consumer protection law and debt collection regulations at least three ways: by demanding that consumers pay debts that Portfolio could not substantiate, by misleading consumers about protections for exempt sources of income, and by routinely failing to verify the accuracy of consumer information Portfolio reported to credit reporting agencies.
Healey’s office started to investigate Portfolio after receiving hundreds of complaints from consumers.
An investigation indicated that Portfolio engaged in deceptive practices that were harmful to low-income, elderly, and disabled consumers. The company routinely pursued consumers with only exempt sources of income like social security, social security disability and supplemental security income, authorities said.
“Consumers who told Portfolio that they relied only on exempt income were pressured by the company to pay money they should have been entitled to keep,” the statement read.
Portfolio often lacked proof that consumers actually owed the debts it collected, resulting in Portfolio going after the wrong consumer or the wrong amount of debt. The company also failed to tell customers about their rights to request proof of a debt or to provide that proof of debt when it was requested by customers, according to the attorney general’s office.
Additionally, the attorney general’s office said Portfolio went after debts that had already been paid or were so old that they were beyond the statute of limitations and legally unenforceable
Portfolio will make changes to its business practices in addition to the $4 million settlement. The attorney general’s office said those changes include:
- Ceasing collection from consumers who only have exempt income and to proactively inform consumers of protections for exempt income as required by state regulations
- Obtaining documentation that proves a debt is valid before attempting to collect from a consumer, informing consumers when their debts are too old to legally collect and refraining from calling consumers more than twice in a seven-day period
- Refraining from reporting a debt to a credit reporting agency that it cannot substantiate and investigating when consumers dispute the accuracy of the information it reports to credit reporting agencies
Any consumers who are eligible for repayment from the Portfolio settlement will be contacted by the attorney general’s office by mail, officials said.
Anyone with questions or concerns about debt collection practices can go online to learn more about fair debt collection, call the AG’s consumer hotline at 617-727-8400 or file a complaint online.