Getting a collection notice from a debt collector you don’t recognize can be terrifying. If you’ve recently found Portfolio Recovery Associates on your credit report, don’t panic. They are one of the biggest debt collection agencies in the country, and they appear on millions of credit reports across the U.S. What you might not know is that just because you see a collections account on your credit report, it doesn’t mean you actually owe the debt, that all the information is correct, or that paying it will even improve your credit score.
In many cases, paying off a collections account won’t even get it removed from your report. It will simply be marked as paid, but it can still affect your credit score for several more years. In this article, we’ll explain what you need to know about Portfolio Recovery Associates and exactly what steps to take if you find them on your report. As you read through this guide, remember that a study by U.S. PIRGs found that 79% of credit reports contain errors or disputes. That fact alone should encourage you to file a dispute as your first line of defense, not your last.
Who is Portfolio Recovery?
Portfolio Recovery Associates, LLC, is a wholly-owned subsidiary of PRA Group, Inc. (Nasdaq: PRAA), a publicly traded company. They are not an original creditor for any of the debts they collect. Rather, they buy charged-off debts from banks, credit card companies, and other lenders for a tiny fraction of what’s owed, then try to collect the full balance from consumers.
How Big is Portfolio Recovery Associates?
In 2024, PRA collected over 1.9 billion dollars. At present, PRA owns approximately 7.5 billion in purchased debt that it has yet to collect. It operates in 18 countries and employs more than 3,200 people.
What’s Their Track Record with the Law?
Portfolio Recovery has more than 82 million dollars in recorded fines and settlements. The Consumer Financial Protection Bureau has issued formal complaints against PRA twice and has officially determined that PRA is a repeat offender that violated the terms of its first consent decree.
In September 2015, the CFPB issued a complaint against PRA that charged PRA with collecting debts that PRA couldn’t verify were owed, filing affidavits with courts that were misleading, and misrepresenting to consumers that PRA had a legal claim to debts when the statute of limitations had run. The consent decree PRA entered into in the case required PRA to provide 19 million dollars in refunds to consumers and to pay an 8 million dollar civil penalty.
In March 2023, the CFPB issued another complaint against PRA for violating the terms of its 2015 consent decree. According to the CFPB, PRA violated the consent decree throughout its entire 5-year term. Specifically, the CFPB found that PRA “tens of thousands of times made representations about debts it had not verified, sent millions of collection letters threatening illegal actions, and failed tens of thousands of times to investigate consumers’ disputes.” The consent decree PRA entered into in the case requires it to pay more than 24 million dollars in penalties.
“After getting caught in 2015, Portfolio Recovery Associates again engaged in unlawful intimidation, deception, and illegal debt collection tactics,” said CFPB Director Rohit Chopra. “Our orders are not suggestions. Companies that disobey them will have to answer to the law.”
The CFPB has received 22,193 complaints against PRA, with 82.5% of those classified as debt collection complaints. PRA has a 1.35-star rating with the Better Business Bureau, despite having an A+ rating as a company. If you’re wondering how the BBB can give PRA an A+ rating as a company despite 22,000 complaints and a 1.35-star rating from consumers, the answer is simple. The BBB is on your side in name only.
Why You Should Not Speak with PRA on the Phone
Whenever PRA calls, it’s to gather information. Information is power. If you give them your name, you are verifying your identity. If you confirm your address, you are telling them where to find you. If you tell them where you work, you are telling them where to garnish your wages. If you acknowledge that you know anything about the debt, you are giving them a reason to pursue you for it.
The smart thing to do when PRA calls is to let them do all the talking and you do all the listening. Do not confirm or deny anything over the phone. The less they know, the better. Do not help them do their job.
Debt collection agencies are trained to use high-pressure sales tactics to get you to do what they want. If you speak with a debt collection agent on the phone, they will use psychological tactics to instill a sense of urgency or fear in you. Those tactics work. Don’t let them try.
The simple fact is that you have more leverage in this situation than PRA wants you to believe. They bought your debt for pennies on the dollar. They need you to pay it. You don’t need to pay them at all, let alone on their terms and on their schedule.
Why a Lack of Documentation is to Your Advantage
Debt buyers don’t always get the documentation from the original creditor. Sometimes it doesn’t exist. Sometimes it isn’t transferred. Sometimes it is corrupted or ruined. When this happens, debt buyers can’t document the debt. And if they can’t document the debt, they can’t prove that you owe it.
Portfolio Recovery has been repeatedly penalized for collecting debts they could not properly substantiate. A Missouri trial court judge criticized their entire business model, noting they showed no remorse and their practices prey against the financially vulnerable.
According to the Massachusetts attorney general, “PRA sought to collect debts that consumers did not owe, attempted to collect debts that were past the statute of limitations, and failed to ensure the accuracy of information it was reporting to the credit reporting agencies.” If the Massachusetts attorney general—with subpoena power—documented these patterns, imagine what an individual dispute might uncover.
How to Dispute a Portfolio Recovery Debt from Your Credit Report
Step One: Get Your Credit Report
Before you do anything, you need to get your credit report. You can get a free copy of it from each of the three major credit reporting agencies one time per year at AnnualCreditReport.com. Get copies from Equifax, Experian, and TransUnion.
Write down every detail about the Portfolio Recovery debt as it is reported on each credit report. Make a note of the account number. Make a note of the balance. Make a note of the date of first delinquency. Make a note of anything else you see.
In many instances, the information one credit reporting agency reports about the same debt will be different than the information another reports. If this is the case, that tells you that credit reporting agency doesn’t know which information is accurate. Different account numbers tell you they can’t verify what account the debt is for. Different balances tell you they can’t verify how much you owe. Different dates of first delinquency tell you they can’t verify when you missed your first payment.
Step Two: Send a Debt Validation Letter
Within 30 days of receiving your first communication from a debt collector, you can send something called a “debt validation letter” that requires the debt collector to provide you with all the documentation it has to verify not only that you owe the debt, but also how much you owe and that the collector has the legal authority to collect it.
You must send the letter within 30 days of your first communication with the debt collector. You must send it in writing. The debt collector is not allowed to contact you until it sends you the documentation.
Insist on everything in writing. Do not trust debt collection agents to keep their promises over the phone. Many times, they don’t even intend to keep those promises. Sometimes, they just get the details wrong. Either way, you can’t count on them to keep their word unless you get it in writing.
Make sure you keep a copy of everything you send. Consider sending it by certified mail and requesting a return receipt. This will provide you with proof of when you sent it and when the debt collector received it.
How Do You Dispute a Debt with a Credit Reporting Agency?
When you file a dispute with one of the big three credit reporting agencies, it will contact the entity that made the credit report (called the “furnisher”) and ask it to verify the information in the report. If the furnisher can’t verify the information within a certain amount of time, the credit reporting agency must remove the information from your report.
In March 2023, the CFPB issued a complaint against PRA that alleged PRA had “tens of thousands of times” made representations about debts it could not verify. If PRA is in the habit of making representations about debts it can’t verify, how will it respond when a credit reporting agency contacts it to verify the debts it’s reporting on your credit report? The likely answer to that question is that it won’t be able to verify them.
Grounds for a Credit Report Dispute
There are a variety of reasons you might dispute a credit report. Here are some of the most common ones associated with debt buyers.
Balance
The balance might be wrong. Balances are often wrong because debt buyers add fees to the balance. They might calculate interest incorrectly. They might fail to apply payments to the balance.
Date of First Delinquency
The date of first delinquency might be wrong. An incorrect date of first delinquency can mean that the credit reporting agency is leaving the account on your report for too long. It might mean that the collector sued you illegally.
The Debt is Not Yours
The debt might not be yours at all. Sometimes the collector has the wrong person. Sometimes the debt is a result of identity theft. Sometimes the collector mixed up your file with someone else’s file. The CFPB has received thousands of complaints about attempts to collect debts that don’t belong to the consumer bringing the complaint. Among the 22,193 complaints the CFPB has received about PRA are numerous consumers who say the company is attempting to collect a debt they don’t owe.
Statute of Limitations
If you have not made a payment on a debt for several years, it might be past the statute of limitations. The statute of limitations varies from state to state, but for most consumer debts it’s between 3 and 6 years. You still owe the debt if it’s past the statute of limitations. But the debt collector can’t sue you for it. The New York Attorney General found that PRA obtained more than 2,000 improper default judgments by suing on debts beyond the statute of limitations. Age can be a silent ally in your dispute strategy.
Why You Need a Professional to Help You Remove a Portfolio Recovery Debt
In most areas of life, it’s a good idea to do things yourself when you can. But when you’re dealing with a debt collector, that’s just not a good idea.
First, debt collectors know how to push your buttons. They do it for a living. They’ll call you dozens of times per week. They’ll leave threatening messages. They’ll make promises to you that they have no intention of keeping. They’ll lie to you directly. Your best option is just not to speak with them at all. But if you do, it’s best to have a third party between you and them.
One PRA customer wrote, “PRA also garnished my wages, placed a lien on my home, attempted to take more money than I owed, and extended the garnishment 6 months past the date agreed upon, despite my written proof of overpayment.” With a credit repair expert in your corner, you won’t have to go through that. And you’ll be protected from all the games that the debt collectors play.
There’s another reason you need a professional to help you with a debt in collections. You probably don’t know your rights. And even if you do, chances are good that you don’t know some of the nuances of debt collection. Most consumers, for instance, don’t know that paying a collection account can actually make it harder to get it removed from your credit report. Most consumers don’t know that you shouldn’t agree to a payment plan over the phone if you haven’t gotten the agreement in writing. And most consumers don’t know the deadline to respond to a collections letter. Miss that deadline, and you’ll waive many of your rights.
A credit repair expert knows all of those things. And more importantly, the expert knows how to use them to your advantage.
Conclusion
Portfolio Recovery Associates is a debt buyer. And like all debt buyers, it has a number of issues. The company has been sanctioned repeatedly for its collection practices. It has paid more than 82 million dollars in fines and settlements. It is officially a repeat offender. And the CFPB has filed formal complaints against it twice.
Just this year, the CFPB filed a formal complaint against PRA that alleged the company had violated a consent decree that the company entered into in 2015. According to the CFPB, between 2015 and 2020, PRA: “tens of thousands of times made representations about debts it had not verified,” “sent millions of collection letters threatening illegal actions,” and “failed tens of thousands of times to investigate consumers’ disputes.” The consent decree that PRA entered into as a result of the complaint requires the company to pay more than 24 million dollars in penalties.
“After getting caught in 2015, Portfolio Recovery Associates again engaged in unlawful intimidation, deception, and illegal debt collection tactics,” said CFPB Director Rohit Chopra. “Our orders are not suggestions. Companies that disobey them will have to answer to the law.”
All of that is useful information if you’re dealing with Portfolio Recovery Associates over a debt. But it’s especially useful if you’re trying to get a Portfolio Recovery debt removed from your credit report. Here’s how you do it.
First, when the debt collector calls, don’t say anything. Let them do all of the talking. The less they know, the better.
Second, within 30 days of your first communication with the debt collector, send a debt validation letter. The letter should be in writing and should require the debt collector to send you all of the information it has about the debt.
Third, order copies of your credit reports from the 3 major credit reporting agencies.
Fourth, if there are any inaccuracies or disputes, dispute them. If the credit reporting agency can’t verify them, it will remove them from your report.
Do You Need to Deal with Portfolio Recovery Associates?
You don’t have to deal with Portfolio Recovery Associates. Not on your own, anyway. The specialists at FightCollections.com know all the games debt collectors play. And we know how to use them against the debt collectors.
Whether you have questions about a Portfolio Recovery debt or questions about something else, we can help. Contact us today for a free consultation.