Take These 3 Steps When Portfolio Recovery Associates Calls You
Portfolio Recovery Associates is a collection agent based in Norfolk, VA. The company buys collection accounts from credit card issuers, auto finance companies, and cellphone providers for 4 to 10 cents on the dollar, and attempts to collect the balance due on the account. The company also buys debt owed by consumers who filed bankruptcy recently. PRA is one of the largest collection agents in the US.
Portfolio Recovery Associates employs 3,200 in the US and UK. More than half of its employees quit or are fired every year. It operates nine call centers in the US and one in Scotland. The company’s collections revenue, which doubled over the last 5 years to more than $500 million annually, is split between call center collections, collections from lawsuits, and chapter 13 bankruptcy accounts. It is a publicly-traded corporation (a rarity among debt collectors) using the stock symbol PRAA.
Because Portfolio Recovery Associates usually owns the accounts it is collecting and is not working for the original creditor, it has a huge range of flexibility in settling the debt. Expect settlements on Portfolio Recovery Associates accounts to range from 40 to 60 cents on the dollar.
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Take these steps when a collection agent at Portfolio Recovery Associates contacts you to collect a debt:
1. Learn the Statute of Limitations on the Debt
Whether the debt is older than your state’s statute of limitations is key to how you respond to a collection call from Portfolio Recovery Associates. Take three steps to learn the statute of limitations status on your debt:
- Learn when the account became delinquent: When did you make your last payment on this debt? Review your records. If you have no records of this account, review your credit reports to see what's reported. The date in your credit report may be incorrect: Use your own records as an accurate guide.
- Learn your state’s statute of limitations for this type of debt: See the Bills.com state statute of limitations page to learn the length of the statute of limitations that applies to your debt.
- Apply your state’s rule to your debt: Generally, the statute of limitations clock starts when the account becomes delinquent. Add 30 days to your last payment due date plus the number of years in your state’s statute of limitations to learn if the statute of limitations clock ran out.
You are in luck if the debt expired. Under the federal Fair Debt Collection Practices Act (FDCPA), a collection agent like Portfolio Recovery Associates may not collect an expired debt. If the clock has run out, send Portfolio Recovery Associates a written cease communications notice immediately.
What if a debt does not appear in your credit reports? It doesn’t matter. What appears or does not appear in your credit reports does not determine if you owe a debt. Debt validation determines if you owe a debt.
If the statute of limitations has not expired, then move on to the next step.
2. Validate the Debt
Validate a debt immediately when Portfolio Recovery Associates contacts you in an attempt to collect a debt. You have only 30 days to validate the debt, so act quickly. Follow the steps we describe in our Bills.com debt validation article to preserve your rights under the the FDCPA. Validate a debt regardless of your personal belief of you owing a debt.
Make sure Portfolio Recovery Associates validates the debt according to the law. If it doesn’t, then send Portfolio Recovery Associates a notice of insufficient validation. If Portfolio Recovery Associates cannot validate the debt, then game-over. It has no legal basis for collecting the debt.
If it can validate the debt and the statute of limitations has not expired, move to the next step.
3. Negotiate A Settlement With Portfolio Recovery Associates
Collection agencies buy collection accounts for 1 to 10 cents on the dollar, typically. The fresher the account, the more an agency pays for an account. Portfolio Recovery Associates has a reputation for buying collection accounts directly from original creditors, so their accounts tend to be fresher than others in the industry.
The individual debt collectors who work for Portfolio Recovery Associates are paid on a commission and have extra incentives to make deals at the end of the week or end of the month. Use this to your advantage if you want to negotiate a settlement to the debt.
Once you pay your collection account off, in full or paying a percentage back as part of a negotiated settlement, Portfolio Recovery Associates will request that the PRA tradeline entry on your credit report be removed from report. The request is generally made within 30 days of your paying off the account. How long it takest disappear depends on how fast the credit bureaus move.
If you do not feel comfortable negotiating, then partner with a debt settlement provider. Debt settlement companies employ teams of people who do nothing but negotiate settlements all day. Debt settlement companies rely on databases of past settlements so their negotiators know what range original creditors and collection agencies have accepted for settlements in the past.
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| News Update |
|---|
| In May 2014, Portfolio Recovery Associates and another collection agent agreed to drop collections on $16 million in judgments. Portfolio Recovery agreed to pay $300,000 in civil fines and other costs. It did not admit to wrongdoing. According to the New York AG’s office, Portfolio Recovery failed to ensure its claims were filed within New York’s statute of limitations law, which requires actions be brought either under New York’s six-year limit or the limit in the state where the original creditor resides, whichever is shorter. |
Portfolio Recovery Associates Lawsuit
If Portfolio Recovery Associates files a lawsuit against you, consult with a lawyer in your state with consumer law experience. You must file an answer to Portfolio Recovery Associates’ summons and complaint, or you risk losing the lawsuit by default. If you lose, Portfolio Recovery Associates will be awarded a judgment, which will allow it to garnish your wages, levy or freeze your bank account, place a lien on any property you own or allow the sheriff to seize your personal property. Ignoring a summons will not make it go away, so take action to respond to the lawsuit.
Bills Action Plan - Dealing with Portfolio Recovery Associates
When Portfolio Recovery Associates calls to collect a debt, learn your state’s statute of limitations for this type of debt, send Portfolio Recovery Associates a debt validation notice, and if necessary, negotiate a settlement to the debt. Get help if negotiations are not one of your skills. Consult with a lawyer if Portfolio Recovery Associates files a lawsuit against you.
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One of my clients has been in prison for decades but PRA shows up on his credit report for $432. I have a POA from him so disputed the debt with Experian. They claimed was a good debt; was PRA even in business in 1983, which was the last time my client was on the streets? Here's said he had a Mervyn's charge card in 1981 and the limit was $150.
Charity, I can't give legal advice, as only an attorney can properly do so. Here are a couple of thoughts, with the understanding that I am not giving you legal advice.
There is no way that a debt from the 1980's should be showing from any creditor or collection agent, given the reqiuirements of the FCRA (Fair Credit Reporitng Act). I don't understand what argument supports it being a reportable debt.
Perhaps you need to check with an attorney who handles violations of the FCRA?
I got a letter in the mail form a law office telling me I am being sued by PRA ( trying to Drum me up as a client) I called the county and they did have something from later winter of this year In regards to PRA, but said I have to be served first and then I have the 20 days to reply. (Haven’t been served yet) The person with the county court suggested I call them to clear it up which I want to do. My question is if I call them and pay the entire debt or settle a percentage, how do I ensure they drop/stop the law suit or what Kinds of proof do I need receipt wise that I have paid it for my records And for credit reporting purposes? I read the book “Bad Paper” (Interesting read Dan, check it out if you haven’t) and I just want to ensure I have a paper agreement as to what part Of the debt I’m going to pay and that they drop the suit before I pay a thing. I don’t want the bait and switch done on me...Any thoughts would be awesome (I know you’re not a lawyer). Gracias
All your questions are good ones (and I appreciate you acknowledging that I am not a lawyer and what I share is not legal advice). Thank you for the recommendation about "Bad Paper."
Please read our article about writing a settlement agreement. You are correct that you need to be clear as to what you are paying off and that your payment for the agreed amount, whether you pay in full or settle the debt for less than you owe, closes the matter entirely.
We view ourselves as on the side of consumers, but that doesn't prevent us from pointing out something a collection agency does that benefits consumers. Portfolio Recovery Associates takes steps to remove the account from the consumer's credit report, once it is paid off. Their website states "Your account will be considered paid-in-full or paid-in-full for less than the full balance after your final payment is successfully posted. Within approximately 30 days of your final payment successfully posting, we will request the credit reporting agencies delete the PRA tradeline related to your account from your credit bureau report."
Hello, I recently paid a debt to portfolio on 2-26 Six days later i received a summons letter. The summons was filed 2-19. Should i do something with the summons or since i paid the account in full will it be void?
Bree, here is some information, shared with the understanding that it is not to be considered legal advice.
If you paid the debt then the issue should be resolved. Still, send an answer or response to the summons and provide proof that the debt is paid. You can also call up Portfolio Recovery Services and confirm that their records agree that you paid the debt. They should not pursue the legal route, as it is a waste of time and money.
Hello, Portfolio purchased an old HSBC Capital One account. I emailed them saying i was disputing, and requested debt validation. They send a letter saying it was valid debt, and sent a few old copied of Capital One Statements, and a letter from Capital One saying "Portfolio Recovery Associates, LLC now owns your account". Does PRA need to show the original agreement between my and capital one with my signature? Or a notarized statement by a person with original knowledge of the debt as it was constituted and who can testify that the debt was incurred legally? Thank you Sir.
Chris, you ask an excellent question. You are questioning the chain of custody, questioning whether sufficient proof exists to demonstrate you are financially responsible for the debt. You could raise the issue if you are sued, but I can't tell you how the court in your area will view this. I recommend that you speak with a lawyer who is experienced in consumer debt issues.
Can they send mail to claim a debt that is way past your state's statute of limitation? They got my number somehow and kept asking me to validate an address but I just hung up on them.
Statute of limitations questions are tricky, because there are actions a person can take that stop the clock from running on the SOL or restart it.
If the debt is, indeed, past the SOL, then it is called a time-barred debt. Please read this excellent article about time-barred debt at the FTC's website.