Consumer complaint received 2018-01-29
Company: PORTFOLIO RECOVERY ASSOCIATES INC
State: CA
Product: Debt collection
Sub-product: Credit card debt
Issue: Took or threatened to take negative or legal action
Sub-issue: Sued you without properly notifying you of lawsuit

Complaint:
***This is not about improper notification of the lawsuit. This is about the initiation and conduct of the lawsuit. I stipulate that I did receive proper service, but there's no category for improper filing of the lawsuit. *** Portfolio Recovery Associates violated sections V, VI, VIII, IX, and X of Consent Order In the Matter of Portfolio Recovery Associates, XXXX ( Hereafter Consent Order ), in the filing of XXXX XXXX XXXX XXXX XXXX XXXX XXXX, case number XXXX, in the Superior Court of California for the County of XXXX. Portfolios attorneys in this matter were XXXX XXXX XXXX ( Bar No. XXXX ) and XXXX XXXX XXXX ( Bar No. XXXX ), and their declarant / witness was XXXX XXXX. Relevant case documents and filings are attached. 

1. On XX/XX/XXXX, Portfolio served me with a summons and complaint in Superior Court on a common count of account stated. This summons and complaint was accompanied only by 2 alleged billing statements and a brief statement claiming compliance with California Civil Code 1788.50 et seq. 

This does not constitute compliance with section VI of the consent order, which prohibits making any representation, expressly or by implication, that a Consumer owes a Debt unless, at the time of making the representation, [ Portfolio ] can substantiate the representation. ( Consent Order, paragraph 116 ) Portfolio made no indication in their summons and complaint of any substantiation which would comply with the requirements of section VI of the Consent Order. 

It is also a violation of section VIII of the Consent Order, which prohibits the initiation of a collection lawsuit without an intent to prove the debt, if contested. 

2. On XX/XX/XXXX, I served a demand for production of documents, in accordance with applicable California laws regarding the discovery process. Portfolio made no response and disclosed no documentation. This is an ongoing violation of section VIII of the Consent Order,  which permanently restrains and prohibits Portfolio from the initiation of a collection lawsuit without an intent to prove the debt, if contested. 

3. On XX/XX/XXXX, I received a large packet of papers from Portfolio, including their trial brief, a declaration in lieu of personal testimony ( with several exhibits ) from a so-called records custodian, and their witness and evidence lists. 

The declaration in lieu is a process whereby, in limited civil jurisdiction cases in the state of California, a declaration or affidavit may be used as testimony, so long as it complies with the requirements of Code of Civil Procedure sections 98 and 2015.5. It will be admissible to the extent that the testimony contained within it would be admissible were it delivered in person. 

Compliance with CCP98 ( a ) requires that the declarant make themselves available for the 20 days prior to the trial at a current address within 150 miles of the courthouse for service of a subpoena. CCP2015.5 requires that the declaration be made under the penalty of perjury. The declarant offered the address of an uninvolved third-party law firm. Upon the attempt to serve a subpoena for personal appearance, nobody at that law firm knew who the declarant was. This constitutes a material misrepresentation, as an uninformed consumer would not know how to defend against such an affidavit and would likely assume that it was pointless to resist or would not know how to properly object. Additionally, in the event that a consumer makes no objection to the declaration in court, it will be accepted by a judge as admissible simply because it contains the appropriate statement of availability for service of process. It may also constitute perjury. This is a clear violation of section IX of the Consent Order. 

The affidavit also contains statements that attached documentation relates to the specific Consumer being sued when that is not the case. ( Consent Order, paragraph 121b ) Specifically, declarants exhibit A, the terms and conditions. It is described at one part of the declaration as being a true and correct copy of the terms and conditions in effect for the case at issue, and in another location the declarant states that its a photocopy produced for the purposes of the declaration because the original is not available. In reality, the agreement produced by the declarant bears a copyright date a year after the account was opened. This is a clear violation of section IX of the Consent Order.

The balance of the declaration offered by Portfolio is, almost word for word, the same boilerplate declaration condemned in the Consent Order in paragraphs 49-55, 74, and 102. It is, in its entirety, materially false, misleading, and constitutes a deceptive act or practice in violation of the CFPA and the FDCPA. The declaration as a whole is inadmissible as evidence, and constitutes a violation of sections V, IX and X of the Consent Order. 

4. Portfolio offered as evidence numerous documents which, individually and severally, fail to comply with the terms of the consent order. Additionally, the documents are inadmissible as evidence under California   state law. 

The bill of sale offered into evidence in exhibit B to the declaration contains no indication of what accounts were part of the sale, and it does not contain a meaningful and effective warranty. In fact, it explicitly disclaims all warranties, except as provided for in the forward flow purchase agreement. Portfolio, however, refused to show that agreement, claiming that it contains confidential and proprietary information. The bill of sale also fails to meet a business record exception to the hearsay rule under Cal. Ev. C. 1271. Any references to any specifics of the accounts transferred under this bill of sale were redacted. This is a violation of paragraph 119c of the Consent Order. 

The affidavit of sale, likewise, does not contain any reference to the specific accounts transferred. It is not a business record and can not find an exception to the hearsay rule under Cal. Ev. C. 1271. Additionally, as an affidavit it is automatically hearsay in California courts, unless it complies with CCP 98 and CCP 2015.5, which this one does not.

The so-called sale file can not find a 1271 exception to the hearsay rule. It can not be authenticated even as a record of any sort, and shows no indication that it was any kind of attachment to the bill of sale. ( Additionally, it contains incorrect personal information used to identify me, and that raises its own set of issues. ) The statements attached to the declaration as exhibits C and D similarly can not find any 1271 exception, and are likewise hearsay. 

This presentation of unauthenticated hearsay documents clearly demonstrates Portfolios lack of intent to prove the debt, if contested. The declarant that Portfolio offers is incapable under California law of providing any authentication which might conceivably have any chance of making these documents admissible. This misrepresentation of evidence is material because, if a consumer is not aware of the details of the laws surrounding the admissibility of evidence in California, he or she might not know to object to this evidence on specific grounds, and the judge would then accept the evidence offered as genuine and admissible. This represents a clear violation of sections V, VI, VIII, IX and X of the Consent Order. 

On XX/XX/XXXX, Portfolios counsel offered to dismiss the suit with prejudice, in exchange for a mutual release of claims. Specifically, I would be required to release them from any liability under the CFPA and the FDCPA. This release was, according to Portfolios counsel, because their declarant would not be available for appearance at the trial. This is a false representation : Portfolios trial witness list indicates that the declarant would be appearing by written testimony, and not in person. The unavailability of the witness for a personal appearance is irrelevant, and is a violation of sections V and X of the Consent Order. 

On XX/XX/XXXX, Portfolios counsel represented to me via email that the Consent Order was not applicable to the alleged account at issue, and therefore that Portfolio was not in violation of the Consent Order. This is plainly not the case, as Portfolio acquired that account after the effective date of the Consent Order. This is a false representation, intended to discourage me from exercising my rights under the CFPA and FDCPA against Portfolio. It is a clear violation of sections V and X of the Consent Order. These emails form exhibit A to file XXXX XXXX XXXX - Defendant 's Declaration in Support of Opposition to Dismissal.pdf. 

OnXX/XX/XXXX, Portfolio dismissed the case without prejudice, with the clear indication being that they intend to continue pursuing me. This is the ultimate expression of their violation of section VIII of the Consent Order : they filed a lawsuit and truly had no intention of ever actually proving the debt.

Company response to consumer: Closed with explanation