Toohey, et al. v. Portfolio Recovery Associates LLC, et al. FDCPA Settlement

UNITED STATES DISTRICT COURT SOUTHERN DISITRCT OF NEW YORK

What is this lawsuit about? Mary Ellen Toohey filed this lawsuit against the debt collectors PRA and Malen (“Defendants”), alleging that Defendants violated the law by obtaining default judgments against consumers in debt-collection lawsuits by filing misleading affidavits that stated that the affiant had personal knowledge of certain account-level documentation that affiant lacked. The lawsuit alleged that these acts violate the Fair Debt Collection Practices Act (“FDCPA”), 15. U.S.C. § 1692, the Racketeer Influenced and Corrupt Organizations Act (“RICO”), New York’s General Business Law (“GBL”), and the common law doctrine of unjust enrichment. Defendants deny the allegations and deny that they violated any laws or acts. The Court did not decide who is right and who is wrong. The parties have agreed to a settlement.

Why did Class Members receive this notice? Class Members received this notice because PRA and/or Malen’s records identified them as  potential members of the following class: “all persons against whom PRA and/or Malen obtained default judgments in the State of New York related to the collection of consumer debt from October 14, 2012 through October 14, 2015.”

What does the settlement provide? Defendants will establish a settlement fund of $1,495,000. Out of the settlement fund will be paid: (1) settlement compensation to participating class members; (2) an award of attorneys’ fees and expenses not to exceed $995,000, subject to the Court’s approval; (3) costs of notice and administration, and (4) incentive awards to the named Plaintiffs not to exceed $10,000 each, subject to the Court’s approval. The maximum recovery for the class allowed by law is $500,000.  It is estimated that each participating class member will receive approximately $25. In addition to monetary payments, the settlement provides that class members will receive non-monetary relief whereby PRA ceases reporting to consumer reporting agencies tradelines for the accounts that are responsible for individuals’ membership of the class.

What are Class Members legal rights and options? Class Members have three options: (1) Do nothing—Class Members will automatically receive a share of the settlement fund and give up their right to start, continue with, or be part of any other lawsuit against the Defendants related to the claims made in this lawsuit and released by the Settlement Agreement; (2) Exclude themselves from the settlement—they will not receive a share of the settlement fund, but they will keep their right to sue the Defendants for any claim released by the Settlement Agreement; and (3) Object to the settlement—write to the court with the reasons why they do not like the settlement and (a) automatically receive a share of the settlement fund, and (b) give up their right to sue the Defendants for any claim released by the Settlement Agreement. To obtain additional information about legal rights and options, as well as a copy of the Settlement Agreement, visit www.portfoliorecoverysettlement.com, or contact the Settlement Administrator by writing to P.O. Box 43502, Providence, RI, 02940-3502 or by calling 1-888-625-8657. The deadline to submit an exclusion or objection is June 16, 2020.

When is the fairness hearing? The Court will hold a fairness hearing on July 16, 2020 at 10:00 a.m. The hearing will take place in the United States District Court for the Southern District of New York, 500 Pearl St., New York, NY 10007. At the fairness hearing, the Court will consider whether the settlement is fair, reasonable, and adequate and, if so, whether it should be granted final approval. The Court will hear objections to the settlement, if any. The Court may make a decision at that time, postpone a decision, or continue the hearing.