Turtle Creek Assets Sues Aaron's, Alleging Company Knew Customer Data Was Bad

ATLANTA, Feb. 19, 2020 /PRNewswire/ -- Turtle Creek Assets has sued Aaron's, Inc. (NYSE: AAN), a leading omnichannel provider of lease-purchase solutions, alleging Aaron's sold it bad borrower default data that has had a negative impact on the company and a collateral effect on thousands of consumers.

Turtle Creek Assets, Ltd. (TCA) vs. Aaron's, Inc. (State Court of Cobb County, 20-A-628, Feb. 18, 2020) alleges that Aaron's sold TCA hundreds of millions of dollars worth of its delinquent accounts (e.g., lease to purchase agreements for furniture and other consumer merchandise that became delinquent) even though Aaron's knew the accounts had issues including being fraudulent accounts; accounts with identity theft issues; accounts on which Aaron's had previously pursued legal or criminal charges; and, accounts in bankruptcy and other issues. TCA maintains that Aaron's did this knowing that it had explicitly promised in a written agreement with TCA just the opposite; namely that the accounts were valid and had no legal issues.

"During the past 10 years, TCA has bought hundreds of millions of dollars face amount of accounts from Aaron's relating to hundreds of thousands of customers of Aaron's," said Gordon Engle, president and CEO of Turtle Creek Assets, Ltd.  "We bought these accounts with the express understanding that these were valid accounts with true amounts owing, and that they represented only instances in which the customer had not settled his account and the merchandise had not been returned."

"As our staff began client actions on accounts, we were distressed to learn that many of the individuals had previously settled with Aaron's, returned the merchandise, had never signed lease agreements with Aaron's or were not even Aaron's customers," stated Engle. "In fact, there were numerous instances where no valid paperwork existed or perhaps never had.  The breadth of the tainted accounts is so pervasive that it threatens to render the entire portfolio uncollectable."

Aaron's wrongful conduct hurt more than just TCA. It also caused TCA to make collection efforts on consumers who should have never been subjected to such activities in the first place.

Client profile:

Alberto E. was stationed at Ft. Stewart United States Army base when he decided to rent two televisions from an Aaron's in Hinesville, Ga. in February 2011. He made almost all of his payments until his home was broken into and the two TVs were stolen. Alberto stopped making his payments in May 2012. In December 2012, Aarons sold his delinquent account to Turtle Creek Assets, Ltd., which began debt collection proceedings. In June 2013, the Aarons store manager filed criminal charges against him and had him arrested. Later, Alberto walked into the store with a sheriff's deputy and paid the balance due of $2,386. TCA was not informed of any of these criminal proceedings.

"By our estimate, approximately 20,000 of the accounts (consumers) Aarons sold TCA have already been prosecuted criminally by Aarons prior to the sale to TCA," stated Engle. "TCA is at risk for any collection efforts it makes because it exposes us to an allegation of improper collection from the debtor as well as Fair Credit Reporting Act (FCRPA) violations."

TCA has purchased 1,000,000 accounts from Aaron's, Inc. Half of the account holders had not made a payment past the initial deposit. Approximately 80% of those 500,000 individuals were acting intentionally to defraud Aarons, which means 20% or 100,000 likely involved individuals who had had their identity stolen.

TCA believes that Aaron's knew it could not ensure that the accounts satisfied the applicable contractual requirements but still sold them to TCA. It is asking for damages in excess of $20 million.

Jeff Tillotson of Tillotson Law, The Sharyland Building, 1807 Ross Avenue, Suite 325, Dallas, Texas 75201 is representing Turtle Creek Assets, Ltd. in this matter.

About Turtle Creek Assets
Turtle Creek Assets, Ltd. (Forward Properties International, Inc.) headquartered in Dallas, Texas has been a recognized leader in the global receivables trading and debt collection industry for over 20 years.

SOURCE Turtle Creek Assets, Ltd.