A California federal court has ordered Portfolio Recovery Associates LLC, one of the largest debt buyers in the country to pay $18 million to resolve multidistrict litigation accusing the debt collection company of violating the Telephone Consumer Protection Act. The company allegedly made autodialed phone calls to consumers without their consent. Multidistrict litigation cases occur when civil actions involving one or more common questions of fact pending in different districts. This case originally involved four separate actions involving violations of the Telephone Consumer Protection Act due to the defendant’s use of an Automated Telephone Dialing System.
The Telephone Consumer Protection Act was enacted in 1991. It was designed to prevent telemarketers from randomly contacting consumer with whom they had no prior business relationship. This Act restricts the use of automatic dialing systems, artificial or prerecorded voice messages, SMS text messages, and fax machines. Restricted Use of these avenues of contact require proper identification and the contact information to be contained in the message left for consumers. Between 2010 and 2015, the number of case filings for violations of the Telephone Consumer Protection Act increased over 940%.
In this case, defendants were involved in the business of purchasing and attempting to collect on debts allegedly owed by consumers. In an effort to collect such debts, the defendants called consumers without prior express consent using an automatic telephone dialing system. Between December 2010 and January 2011, the plaintiffs in this case filed actions against the defendants in the Superior Court for the State of California for the County of San Diego, in the Northern District of Illinois, and the District Court for the Southern District of California.
In September 2011, the District Court for the Southern District of California entered a preliminary injunction against Portfolio Recovery Associates from the continued use of certain dialing equipment to call consumers’ cell phones.
Under the terms of the proposed settlement, defendants will pay $18 million to consumers harmed by their illegal practices. The class in this case has been defined by the agreement as “All natural persons residing in the United States who received one or more telephone calls from an autodialer or a predictive dialer operated by Defendants to such person’s cellular telephone number between December 23, 2006 and July 1, 2013.” Approximately, 7.4 million class members meet requirements of this definition. Members of the class action suit will receive a pro rate share of the settlement after payment of notice and administration costs. Additionally, an injunction will prohibit Portfolio Recovery Associates from using its Avaya Proactive Contact Dialer to place calls to any person’s cell phone without prior consent. After the class members are allocated their share of the recovery amount, any remaining funds will go to the National Association of Consumer Advocates. None of the funds will revert to the defendants.