Consumer complaint received 2024-11-07 00:00:00
Product: Debt collection — I do not know
Issue: Attempts to collect debt not owed — Debt was result of identity theft
Company: Portfolio Recovery Associates, LLC
State: NE

Complaint narrative:
Reselling or returning a fraudulent debt related to identity theft to another collector or the original creditor is legally restricted under federal laws, and such actions can potentially be prosecuted or penalized if they lead to continued harassment, misrepresentation, or violation of consumer rights. Heres an outline of relevant statutes and potential criminal implications : 1. Fair Debt Collection Practices Act ( FDCPA ) 15 U.S.C. 1692e False or Misleading Representations : The FDCPA prohibits debt collectors from using false, deceptive, or misleading representations in connection with debt collection. If a collector knowingly resells or returns a fraudulent debt, it could be seen as a deceptive practice, especially if they have been informed that the debt is fraudulent or connected to identity theft. 

Under this section, debt collectors who misrepresent the legitimacy of a debt by reselling it could face penalties, as this perpetuates fraudulent collection activities.

15 U.S.C. 1692d Harassment or Abuse : Continuing to pursue or facilitate the collection of a fraudulent debt, even by reselling it, may be considered harassment, especially if the collector or creditor is aware of the identity theft claim. Reassigning the debt to keep collection activities going could violate this provision if it leads to harassment or repeated contact for a debt thats not owed. 

15 U.S.C. 1692k Civil Liability : Under the FDCPA, a consumer can sue for damages if a debt collectors actions result in harm. If a fraudulent debt is resold and continues to cause harm, the consumer may be entitled to statutory, actual, and potentially punitive damages. 

2. Fair Credit Reporting Act ( FCRA ) 15 U.S.C. 1681s-2 Responsibilities of Furnishers of Information : The FCRA mandates that creditors and debt collectors who furnish information to credit bureaus have a duty to report accurate information. If they knowingly sell or transfer a fraudulent debt related to identity theft, they violate FCRA by perpetuating inaccurate reporting, potentially exposing themselves to civil liability. 

If a consumer disputes a debt as fraudulent, the collector or creditor must investigate before continuing to report or transfer it. Ignoring this duty by reselling a disputed debt could be seen as a violation of the FCRA. 

3. Identity Theft Laws 18 U.S.C. 1028 Fraud and Related Activity in Connection with Identification Documents, Authentication Features, and Information : Although primarily focused on direct identity theft and fraud, if a debt collector knowingly transfers a fraudulent debt tied to identity theft, this statute could apply. Misusing or misrepresenting someones identity to collect a debt that is not theirs could fall under this statute, particularly if it leads to financial harm or harassment. 

18 U.S.C. 1029 Fraud and Related Activity in Connection with Access Devices : If debt collectors or creditors manipulate personal data linked to fraudulent accounts, this could fall under fraud-related statutes, especially if they are found to knowingly participate in or facilitate identity theft activities. 

4. State Laws and Potential Criminal Charges State Consumer Protection Laws : Many states, including Nebraska, have consumer protection laws that prohibit unfair or deceptive trade practices, which could cover the sale or transfer of fraudulent debts. Nebraskas Consumer Protection Act ( XXXXXXXX XXXX XXXX XXXX XXXX XXXX  ) could apply, potentially allowing for penalties and fines if debt collectors engage in unfair practices with known fraudulent debts. 

Data Breach and Fraud Laws : Some states also impose criminal or civil penalties on businesses that fail to safeguard personal information. Reselling a debt after it has been identified as fraudulent might be considered a failure to protect consumer data, subjecting the collector or creditor to penalties under data privacy laws. 

XXXX. It a Crime Potential Criminal Liability : While the FDCPA and FCRA primarily provide for civil penalties, certain actions by debt collectors, such as knowingly reselling or transferring a fraudulent debt, could cross into criminal territory if they involve intentional deception, fraud, or misuse of personal information. 

Criminal Fraud and Identity Theft : If a debt collector knowingly and intentionally facilitates identity theft by reassigning or selling fraudulent debt, they could face criminal fraud charges under both state and federal laws, particularly if their actions are deemed intentional and result in financial harm to the victim.

Company response to consumer: Closed with non-monetary relief