Debt collectors ordered to refund millions to consumers

The two largest debt collectors in the country are refunding millions of dollars to customers over allegations they used deceptive practices to collect bad debts.

Encore Capital Group and Portfolio Recovery Associates allegedly bought potentially inaccurate debt and attempt to collect on it using illegal litigation practices, according to the Consumer Financial Protection Bureau.

"Encore and Portfolio Recovery Associates threatened and deceived consumers to collect on debts they should have known were inaccurate or had other problems," said CFPB Director Richard Cordray in a news release Wednesday.

Encore Capital agreed to pay up to $42 million in refunds, stop collection on $125 million in debt and pay $10 million in penalties to the bureau's Civil Penalty Fund. Portfolio Recovery Associates, a subsidiary of PRA Group, has to pay $19 million in refunds, stop collecting on $3 million in debt and pay $8 million to the fund.

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