Consumer Finance Insights
July 28, 2017

Debt Collector Ordered to Pay $25 Million to State of Texas for Illegal Debt Collection Practices

On July 11, 2017, Texas Attorney General Ken Paxton secured a $25 million judgment and permanent injunction against a portfolio management company and a small law office for violations of the Texas Debt Collection Act, Texas Deceptive Trade Practices-Consumer Protection Act, and Identity Theft Protection and Enforcement Act.

A jury in the District Court of Harris County determined that the defendants violated the Texas Deceptive Trade Practices-Consumer Protection Act when they filed nearly 900 consumer debt collection cases against debtors who did not live in Harris County at the time of suit and who did not enter into the underlying loan contracts in that county.  The jury also found that the defendants publicly filed unredacted sensitive personal information, such as social security numbers and driver’s license numbers.  It also found that defendants violated the Texas Debt Collection​​ Act by attempting to collect debts related to motor vehicles without a license.

In its final judgment, the Texas state court ordered the defendants to pay the State of Texas $25,165,500 in civil penalties and over $559,000 in attorneys’ fees and investigative costs.