Portfolio Recovery Associates - How to deal with Collection Calls

Portfolio Recovery Associates, founded in 1996, is one of the largest collection agencies in the US. The company buys collection accounts from credit card issuers, auto finance companies, and cellphone providers for 4 to 10 cents on the dollar. It attempts to collect the balance due on the account. The company also buys debt owed by consumers who filed for bankruptcy recently. What is Portfolio Recovery Associates? Are they real or a scam?

What is Portfolio Recovery Associates? Are they real or a scam?

Portfolio Recovery is not a scam. It is a real debt collection agency. They are one of the largest debt buyers. PRA buys debts from credit card companies, banks, financial institutions, utility and telecommunication companies, and other service providers. It has developed a reputation as an aggressive debt collection company.

Portfolio Recover is also known as PRA, Portfolio Recovery Associates, and Portfolio Recovery Associates LLC.  Portfolio Recovery Associates, LLC has 520 total employees. They are located in Norfolk, Virginia, and have offices in Kansas, Tennessee, Alabama, Texas, and North Carolina. It is a publicly-traded corporation (a rarity among debt collectors) using the stock symbol PRAA.

Do you owe Portfolio Recovery money?

You may not be familiar with Portfolio Recovery Associates LLC until they contact you about a debt. They buy debt from many original and third-party creditors.  Your credit report may show the name of the original creditor as well as PRA. 

However, there are various reasons that you may not owe the original creditor or the current owner of the debt money. For example, the debt may not belong to you, the statute of limitations expired, or you already paid off the debt.

Take these steps when a collection agent at Portfolio Recovery Associates contacts you to collect a debt:

Step 1 - Validate your 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.

Is it worth your time to validate a debt? Yes! According to a 2013 FTC study, col­lectors could not verify nearly 50% of disputed debts. The least likely accounts to be validat­ed are med­ical, tele­com­munica­tions, and utility debts, and accounts for more than 6 years old.

Make sure Portfolio Recovery Associates validates the debt according to the law. If it doesn’t, then send them a notice of insufficient validation. If PRA cannot validate the debt, then game-over has no legal basis for collecting the debt.

Follow the steps we describe in our Bills.com debt validation article to preserve your rights under the FDCPA. Validate a debt regardless of your personal belief of you owing a debt.

Step 2 - 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:

1. 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.
2. 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.
3. 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 would be 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 expired debt. If the clock has run out, send Portfolio Recovery Associates a written cease communications notice immediately.

>> Learn more: Learn more about states' laws regarding statute of limitations.

If it can validate the debt and the statute of limitations has not expired, then move to the next step.

Learn how to negotiate your debt with Portfolio Recovery

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.

Because PRA owns the accounts, it is collecting and is not working for the original creditor, and 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.

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 the month. Use this to your advantage if you want to negotiate a settlement to the debt.

It is possible to do negotiations on your own. However, dealing with an aggressive debt collector, especially with aggressive lawyers, is stressful. It takes a significant amount of time and effort. It is helpful if you convince them that you are in a hardship. Here are three tips:

• Be calm, clear, and convincing.
• Be persistent.
• Send a debt negotiation letter.

A professional can reach a negotiated settlement with your debt collection agency quickly. If you are in financial hardship and have a large debt, consider using a professional debt negotiation company. Reputable debt settlement companies have large teams of negotiators, vast databases, and sophisticated tools. They know what range original creditors and collection agencies have accepted for payments in the past.

Stop Portfolio Recovery from debt collection harassment.

The Fair Debt Collection Practices Act strictly regulates debt collection agencies like Portfolio Recovery Associates. Even so, many consumers complain about overly aggressive and illegal collection tactics.

Here are some of the actions that they are forbidden to do:

• Use the Telephone to Annoy or Harass
• Use Abusive or Threatening Language
• Contact a Consumer at Work
• Threaten Arrest
• Seek Unjustifiable Amounts
• Contact a relative, friend, or colleague who doesn’t own the debt
• Call at an unreasonable time such as before 8:00 AM or after 9:00 PM

If you believe Portfolio Recovery Associates violated your rights under the FDCPA, consult with a consumer rights attorney in your area. Discuss possibly filing a lawsuit against the collection agency; not only could a lawsuit result in the cancellation of your debt, but you could be awarded damages.

Complaints and lawsuits about Portfolio Recovery Associates LLC

Due to its large volume of debt tradelines, Portfolio Recovery has many complaints registered in the BBB and the Consumer Finance Protection Bureau (CFPB) like most collection agencies.

The CFPB has complaints about collecting a debt that the consumer didn’t owe, harassment and impersonating an attorney, law enforcement, or government official. The complaints themselves are not proof of illegal or improper activities, although an excellent source to learn about how consumers perceive the interactions and problems they have with the debt collection agencies.

Here are some examples of complaints from the CFPB website:

Communication tactics - You told them to stop contacting you but they keep trying calling multiple times a day, "Calling multiple times a day, every single day, for the entirety of the day from dozens of numbers after I have repeatedly told them to stop. I can not even use my phone for legitimate purposes". 

False statements or representation - Attempted to collect wrong amount "Portfolio Recovery Collection Agency Used unfair collection practices in violation of the fair credit protection act by trying to make me pay more after their third party representation know as XXXX XXXX XXXX, XXXX. in the state of Georgia settled in full the case for a one full settlement payment of {$460.00} with a settlement letter sent to me. Later Portfolio reported a balance of {$150.00} on my credit report and did not report my account paid and settle to close the collection account. I am being defrauded here and this is unfair collection practices. thanks".

Can you remove Portfolio Recovery Associates from your credit report?

Since PRA or a similar name the company uses may be on your credit report, along with the original creditor.

Most accurate negative tradelines remain on your credit report for seven years from the delinquency date. Bankruptcies stay for ten years, and judgments can stay for even longer if the creditor renews them.

You can remove inaccurate data from your credit report. It is possible to file a dispute with the Credit Reporting Agencies and remove the negative items from your credit report.

According to the PRA website, 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 the report. The request is generally made within 30 days of your paying off the account. How long it takes to disappear depends on how fast the credit bureaus move.

>> Learn more: Learn how to dispute a credit report.

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.