Judge Throws Out State AG Case Against Debt Buyer

A Missouri Circuit Court judge last week threw out a lawsuit filed by that state’s attorney general against a debt buyer. The suit alleged unfair debt collection practices, among other things.

Judge Robert H. Dierker, of Missouri’s 22nd Judicial Circuit, dismissed a lawsuit filed against Portfolio Recovery Associates (PRA) by Missouri Attorney General Chris Koster. Koster had attempted to apply Missouri’s Merchandising Practices Act to PRA’s debt collection activity in the state. This application is what ultimately led to the judge’s ruling. Dierker said that the MMPA could not be applied to debt collection.

"We are very pleased with the decision handed down last week," said Steve Fredrickson, PRA’s chairman, president and CEO in a press release. "Our company has always sought to treat our customers fairly and in accordance with the law, and we will continue to help our Missouri customers resolve their financial problems and improve their lives."

Attempts to reach Koster’s office for comment were unsuccessful.

Koster announced the suit against PRA in August 2009. He sued another unrelated debt collection agency at the same time.

When the suits were announced, both companies told insideARM.com that it was a complete surprise (“Missouri Attorney General Blindsides Two Debt Collection Firms with Lawsuits,” Aug. 20, 2009). PRA was informed of the action by reporters. The announcement alleged that PRA and the other ARM company, Kansas City-based Professional Debt Management (PDM), were “operating scams” to collect money from Missouri residents.

Portfolio Recovery Associates, Inc. is a debt purchaser and ARM firm based in Norfolk, Va. and trades on the Nasdaq stock exchange under the symbol PRAA.