Mar 4, 2025
One of the nation’s largest debt collectors launched tens of thousands of lawsuits in Arizona since 2022, according to 12 News, even as it was issued millions of dollars in penalties for consumer violations. At least one person feels some cases might not be legitimate.
Anne Munoz was among those targeted by Portfolio Recovery Associates (PRA) — but the retired school bus driver challenged the debt collection giant in court and won.
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“When you come after me wrongfully, I’m going to make as much noise as possible, and that’s what I’ve done,” she said to the local broadcaster. “I’m not backing down.” And she wants to help others.
Munoz, who spends her days taking care of her husband, who has Parkinson’s disease, at their homestead in Vernon, Arizona, told 12 News that she was sued by PRA in September over a debt she claims she didn’t owe — $2,753.75 for a computer she bought in 2011 but had already paid off.
“It’s not my debt,” a confused Munoz said in a story published Jan. 8. “I don’t know if this has to do with fraud, credit fraud or what.”
Munoz felt the company didn’t work to contact her before filing the lawsuit and there was insufficient evidence of the debt. Her case was dismissed by a judge on Jan. 15, reports 12 News. But she fears others may be caught up in similar situations who don’t know how to fight back.
According to 12 News, PRA has filed more than 20,000 lawsuits in Arizona’s Maricopa County alone since 2022. Meanwhile, the company was ordered to pay over $24 million by the Consumer Financial Protection Bureau (CFPB) in 2023 for business practice violations.
Financial crunch
In announcing penalties against PRA, the CFPB charged the company with initiating thousands of “legal actions” against consumers when it “lacked proper documentation about the debt.” This also wasn’t the first time the CFPB held PRA under the microscope. The agency noted violations of a previous order against PRA.
“After getting caught red-handed in 2015, Portfolio Recovery Associates continued violating the law through intimidation, deception and illegal debt collection tactics and lawsuits,” Rohit Chopra, CFPB’s director at the time, stated in a March 2023 news release. It was not specified where any violations may have occurred.
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Furthermore, in 2024, PRA settled a class-action lawsuit in North Carolina for $5.75 million. The suit alleged that PRA violated state law by obtaining default judgments against debtors without filing sufficient evidence to substantiate the debts.
“You don’t know who these people are, and they’re suing on debts that were owed years ago that you, for some reason or another, could not pay or did not pay,” Jason Pikler, an attorney who worked on the class-action case, told 12 News. “Most people, unfortunately, do not respond to these lawsuits, and the debt buyer then can move forward with getting a default judgment.”
Despite being penalized for millions of dollars, PRA estimates future collections in the billions.
Back in Arizona, a strange twist to the Munoz case: After being served the lawsuit, Munoz did some digging. She says a different Anne Munoz in Missouri had been sued by PRA for the same debt she had been. News 12 says it confirmed a separate Missouri lawsuit had been filed in April for the same debt. That suit was eventually dropped.
News 12 reached out to PRA, asking about its work to verify debts in its Arizona lawsuits. The company replied: “As a practice, we do not comment on specific legal matters. However, please note that we adhere to strict local, state and federal regulatory and statutory requirements, while seeking to define the highest standards in the industry. We also strive to act with integrity and treat our customers with respect and empathy at all times.”
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Debt collection red flags
Getting a message from a debt collector can be stressful and overwhelming, but it’s important to respond in a timely and appropriate manner. Some collectors may rely on fear and forgetfulness in the hopes an unwitting consumer will pay. Here are three red flags to watch out for and what to do if you see them.
1. Unfamiliar or outdated debts
Consumers may be sued for debts they don’t recognize or are simply old, but it’s important to note there’s a statute of limitations on suing to collect debt. According to the FTC, after the statute of limitations runs out, the debt is considered “time-barred,” and it is against the law for the collector to sue you for payment. However, if you acknowledge the debt or pay a portion of it, it resets the clock on the statute of limitations. Note that how long a statute of limitations can last varies by state and type of debt.
2. Lack of documentation
Debt collectors are required to provide validating evidence of the debt they're attempting to collect. According to the CFPB, that documentation must include the name of the creditor, the account number (if any), the current amount owed and an itemized bill that lists the debt and any interest, payments and late fees. Consumers have 30 days to dispute in writing the debt upon receipt of this information.
3. Aggressive tactics or intimidation
If a debt collector uses threats or pressure tactics, such as threatening harm or arrest, this is against the law. Consumers should report any illegal or harassing practices to the CFPB, FTC or your state’s attorney general.
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Danielle is a personal finance writer based in Ohio. Her work has appeared in numerous publications including Motley Fool and Business Insider. She believes financial literacy key to helping people build a life they love.
