An Extreme Case of Debt Collection

     CONWAY, Ark. (CN) — In a complaint of civil racketeering, fraud and outrage, an Arkansas woman says a debt collector froze her bank account to try to collect $43,200 in interest on a $6,000 judgment that was less than 2 months old — which she didn’t owe in the first place because it resulted from identity theft.
     Loretta Burks claims that Portfolio Recovery Associates’ “unconscionable and outrageous” acts came from a debt she does not owe and deprived her of due process.
     She sued Portfolio Recovery Associates LLC on April 8 in Faulkner County Court, one year after it tried to collect $50,023 from her bank account.
     The Virginia LLC, based in Little Rock, is listed by the Federal Trade Commission as one of the largest debt buyers in the United States.
     Burks says in the lawsuit that Portfolio’s “self-proclaimed knowledgeable and experienced” attorneys should have known better.
     “It is unconscionable and outrageous that defendant is attempting to collect $43,265.82 in interest on a judgment of $6,016.07 taken less than sixty (60) days prior to the writ of garnishment being issued that only allow post-judgment interest at a rate of five (5) percent,” the complaint states.
     Burks’ attorney said the company blames it on a computer error.
     “The defendant alleges in a new pleading in a companion case that this was a computer error that has been corrected and that no harm came to Ms. Burks because of that computer error,” Cruz told Courthouse News.
     “We continue to disagree that Ms. Burks was not harmed, but a Faulkner County judge will decide this issue in a court of law.”
     According to a court document in Burks’s garnishment proceedings, Burks was a victim of identity theft, and Portfolio did not disclose that information to the court.
     Instead, the debt collector sought continuances for two years and then issued a writ of garnishment that included more than $43,000 in “accumulated interest” on a two-month-old judgment, Burks’s motion for a new trial says.
     Portfolio recovered $3,000 when it froze her bank account a year ago. The new-trial motion says the alleged debt arose from an account with General Electric Credit Corp.
     A spokesman for Portfolio declined to comment.
     The company says on its website that its representatives are trained to comply with the Fair Debt Collection Practices Act “and other federal, state and local consumer protection laws.”
     Burks says in her lawsuit that the ordeal has caused her to suffer public humiliation, stress and emotional distress, as well as “headaches, stomach irritation, loss of sleep and costs of additional medication.”
     She seeks punitive damages for violations of state and federal fair debt collection laws, deceptive trade, fraud, civil RICO violations, outrage, slander of credit
     Attorney Cruz is based in Hot Springs.

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