Debt collectors are coming for more people — How one woman fought back

CHARLOTTE, N.C. — Faced with the same foe, others might have folded, but Shari Spector fought one of the country’s largest debt collectors and won a more than $5,000 settlement. Nearly 20,000 others in North Carolina did the same.

“These companies shouldn’t be allowed to do whatever they want,” Spector said. “My biggest thing is to protect other people. That means something to me.”

Her attorney said Spector’s experience should serve as a wake-up call for anyone who’s ever signed up for a credit card. Failing to make payments decades ago can cause devastating consequences down the road without deliberate action.

“My own personal belief is that debt buyers, I wish they didn’t exist,” North Carolina Justice Center Senior Attorney Jason Pikler said. “These are debts that the original creditor has decided are worthless. They’re not pursuing them and so, instead of just writing them off on their taxes, which they do, they then turn around and sell them to these companies for pennies on the dollar. Then they take these worthless debts and turn them into a billion-dollar business by getting civil judgments against poor people.”

Pikler said the process usually starts with a phone call or mail from a vaguely named company about past debt that people tend to underestimate. After all, it’s not the original company they financed through. Rather, it’s a collector who bought their debt long after it went unpaid. Pikler said ignoring those notices or just blindly paying is the last thing consumers should do. Instead, they should take it seriously and ask for help.

“Unfortunately, debt collectors do have the upper hand in the sense that they can afford legal counsel,” he said. “I would urge (people) to open their mail. I would encourage anyone who gets a notice in the mail that is a summons that has a complaint attached to it and says, ‘You have 30 days to respond to this,’ that you should take that seriously and you should reach out for help. No one wants to have to deal with taking off time from work or responding to a lawsuit, but try to get help so that you’re not by yourself facing the behemoth of a debt buyer, but that you have some legal counsel, some advice behind you.”

Legal support, coupled with Spector’s persistence, allowed her to escape the debt that continued hanging over her.

It all stemmed from a decision she made 25 years ago to open an HHGregg credit card and save a few bucks on two televisions she bought.

“I had cash to buy them, but they actually had a promotion going on,” Spector recalled.

Fulfilling the terms of that two-year, no-interest promotion never seemed like it would become a problem.

“I had always planned to pay it,” she said.

Records show that early on, she made payments, but then her world came crumbling down. The Charlotte woman said she kept up for as long as she could after losing her job, but eventually had to make tough decisions.

“Food. Clothing. Shelter. That’s what got paid,” Spector said.

Many years down the road, the phone started ringing. Spector said a company called Portfolio Recovery Associates called her at all hours of the day, claiming PRA now owned her debt and it was time for her to pay up. At that point, her remaining balance, complete with late fees and interest, sat at almost $2,800, court records show. Eventually, they took her to court.

“I was saying, ‘I will do this. I owe the money. I’m happy to pay it, but you have to prove that you own that debt. I’m not just going to give you money. I don’t even know who you are,'” she said. “They sued. They sent a sheriff to my door. That did scare me. I wasn’t avoiding anything and then you come at me like that. No, no, no.”

That’s when she enlisted the help of attorneys.

“It was exhausting,” Spector said of the experience.

But worthwhile.

Pikler used his legal skills to help fight back on behalf of Spector and others. He filed a class-action lawsuit against PRA, claiming the company failed to follow the rules in place at the time.

“Before a debt buyer can even make a phone call, they’re supposed to verify the amount that’s claimed to be owed and also verify that they are indeed the owner of that debt,” Pikler said. “Before filing a lawsuit, they are supposed to send a written notice to the debtor that includes information showing that they owned the debt and also that itemizes the debt. Even if debt buyers should be allowed to function, they at least should be able to follow certain rules when they collect.”

In the end, Pikler helped secure a $5.75 million settlement for 18,000 North Carolinians. In addition, Pikler said PRA agreed to cancel all default judgments that hadn’t already been fully satisfied.

“I think that we definitely put some brakes on the runaway train that is the debt buyer industry in North Carolina,” Pikler said. “We were able to slow them down.”

The problem is not isolated to North Carolina. WCNC Charlotte’s content partner in Phoenix, KPNX, discovered PRA incorrectly tried to collect debt from a woman named Anne Munoz.

“This came out of the blue,” Munoz said of the debt notice. “It’s not my debt.”

A judge in Arizona dismissed her case in January.

“When you come after me wrongfully, I’m going to make as much noise as possible,” Munoz said.

The cases are not unusual. In 2023, the Consumer Financial Protection Bureau ordered PRA, labeled a “repeat offender,” to pay more than $24 million, in part, for illegal debt collection practices. CFPB noted the “debt collection giant filed lawsuits even when it lacked documentation about the debt.”

Pikler believes there’s a need for more regulation of the industry since the judgments debt buyers secure put people in an unfair situation due to unforeseen life circumstances.

“If things look up for you and you suddenly are able to buy a home, in order to buy that home, you’re going to have to pay off the judgment first. Or, if you want to refinance your home, you’ll have to pay off the judgment, so it can be really debilitating for folks to have these judgments on their records,” he said. “Folks who have their bank accounts seized, for example, that can lead to a cascade of consequences. If you have your vehicle taken, that can lead to a cascade of consequences. Obviously, not exclusively, but this is impacting people with low to moderate incomes who maybe went through or are going through a bad period of their lives and then these judgments are going to double down and make their economic recovery all the more difficult. There’s no upward mobility.”

Shari Spector wants more accountability too. With the North Carolina Justice Center’s help, a judge eventually vacated the judgment against her, criticizing PRA in the process for claiming to have reviewed required account documents “when in fact they really didn’t.”

“Just hearing that was complete vindication that I was right,” Spector said.

Eventually, she secured a settlement too.

“The people that know me would be so surprised that I fell for this, that I had to go through this, but they would not be surprised that I fought to the very end,” she said.

A spokesperson for Portfolio Recovery Associates wouldn’t talk specifically about any case, but assured WCNC Charlotte the company follows the rules.

“We adhere to strict local, state and federal regulatory and statutory requirements, while seeking to define the highest standards in the industry,” PRA Group Senior Vice President Elizabeth Kersey said in a statement. “We also strive to act with integrity and treat our customers with respect and empathy at all times.”

Contact Nate Morabito at nmorabito@wcnc.com and follow him on Facebook, X and Instagram.

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