If you’ve recently received a phone call or a letter from a company called Portfolio Recovery Associates, you’re going to need to get busy.
They are a debt collection agency that specializes in purchasing past-due debts from various businesses and institutions such as:
- student loans
- credit card companies
- medical bills
- utility bills
…then collecting from the debtors.
PRA Group is what the financial industry calls a debt buyer, but most consumers know under the term debt collection agency.
And in all likelihood, they’ve already reported your past-due obligation to the credit bureaus, damaging your credit score.
Those three credit reporting agencies, Transunion, Equifax, and Experian, make up your FICO credit score, basically giving future lenders a good idea if you’re a trustworthy borrower based on your track record with past lenders.
It’s normal to feel overwhelmed and stressed, but there is hope. You may be able to remove Portfolio Recovery from your credit report, or at least minimize the damage the entry is doing.
We’re going to go over who Portfolio Recovery is, how they work, and how you can recover from a blow to your credit score.
What is Portfolio Recovery Associates?
Portfolio Recovery Associates, LLC is based in Norfolk, Virginia, and was launched in 1996.
It’s a debt collection agency that focuses on full compliance with laws and regulations governing the industry.
They also offer custom solutions for resolving their debts with an emphasis on treating them fairly and respectfully.
Though many debt collection agencies collect debts for client creditors for a fee, Portfolio Recovery Associates works a little differently.
Instead of acting as a collection intermediary, they instead purchase the debts, effectively becoming the primary creditor
They’ll typically purchase debts for something less than the full amount owed to the original creditor.
In that way, the creditor gets at least a partial payment on the outstanding debts immediately.
Portfolio Recovery Associates then seeks to collect the full amount of the debt owed.
Their profit on the transaction is the difference between what you as the debtor pay on the obligation, like Capital One or Synchrony Bank, and what Portfolio Recovery Associates paid to purchase the debt from the original creditor.
The more Portfolio Recovery Associates can recover from you in the payment process, the higher their profit margin will be.
That may make them a little bit more difficult to work with than many other debt collection agencies.
How to Remove Portfolio Recovery from a Credit Report
Let’s look at the strategies you’ll need to employ to bring get them off your credit report.
1. Prepare Yourself for the Task at Hand
Taking on a debt collection agency is far from the easiest financial endeavor you will ever engage in.
The problem is that collection agencies are professional debt collectors.
Not only do they know the law — and exactly what they can get away with — but their years of experience have shown them how far they can push a consumer to get them to pay.
You’ll need to be fully prepared for that onslaught from the first robocall blowing up your cell phone or correspondence you receive.
KNOW YOUR RIGHTS UNDER FEDERAL LAW
The number one strategy is knowing your rights under federal law.
That refers to the Fair Debt Collection Practices Act (FDCPA).
Which has been designed specifically to provide consumer protections against debt collectors.
You can learn all about the basic provisions of the law by familiarizing yourself with the Debt Collection FAQs provided by the Federal Trade Commission (FTC).
When you first make contact with Portfolio Recovery, be sure to reference the Act, and even one or two provisions of the law.
That lets the collection agency know you’re aware of your rights. And that will keep your exchanges more civilized.
The next step in the preparation phase is to get a recent copy of your credit report.
You can get a free copy of your credit report from all three credit bureaus from an online company, AnnualCreditReport.com.
They’re the only source officially authorized to provide you with a copy of your credit report from all three bureaus.
What’s more, the reports are free of charge under federal law.
Once you get a copy of your credit reports, trace the Portfolio Recovery debt to any other obligations you may have owed in the past.
If nothing matches up, the debt may be a mistake. More on that in just a bit.
2. Require Portfolio Recovery to Validate the Debt
A collection agency like Portfolio Recovery — which buys past-due debts in bulk — often receives inaccurate information on each debtor.
That may include you. Oftentimes, it’s a matter of mistaken identity.
Someone with a similar name or Social Security number is the actual debtor, but your name is erroneously associated with the account.
At a minimum, every debt collection agency is required to provide you with a debt verification also known as debt validation.
That’s a listing of the original creditor, the amount owed, the dates of the obligation, and any other relevant information.
You must demand they supply you with this verification of a valid debt.
If they can’t, or if the information provided is in error, they must stop pursuing you and correct any negative information they reported to the credit bureaus.
There’s an important detail in dealing with debt collection agencies that you must understand and accept as a bedrock reality.
Also, keep in mind you have 30 days from the first time they contacted you to demand validation.
After that, it can become tricky disputing anything but not impossible. All communication with a debt collector must be in writing.
There are two reasons for this:
- The written correspondence provides you with a paper trail that you can use as evidence against the agency, and
- Collection agencies may make verbal promises, but they’re not required or likely to keep them.
3. What to do if the Debt Isn’t Yours
If Portfolio Recovery fails to prove a collection is legitimately yours, demand that they remove the negative information from your credit report and stop contacting you.
But first, you’ll need to get them to send you a letter acknowledging that the debt is not yours.
That will help your cause if you need to go directly to the credit bureaus to have negative information deleted.
However, if Portfolio Recovery can’t verify that the debt is legitimately yours, and they refuse to send you a letter to acknowledge as much, you can open a dispute with the three credit bureaus — Experian, Equifax, and TransUnion.
They are legally required to open an investigation within 30 days of receiving your request.
If upon contacting Portfolio Recovery, the company is unable to fully verify the debt, the credit bureaus will be legally required to delete the entry from your credit report.
4. What to do if the Debt Is Yours
If, after doing your own investigating or having the debt fully verified by Portfolio Recovery, it turns out to be a legitimate obligation, you’ll have two choices:
- pay the debt in full
- make a settlement for a reduced amount in satisfaction of the full balance, whether in a lump sum or payment plan
The one reality you have working in your favor is that Portfolio Recovery wants to get paid on the collection.
For that reason, they may accept less than the full amount in complete satisfaction of the debt. And that should be your first offer.
Offer to fully satisfy the collection for no more than 50% of the full amount due.
This is much easier to do on very old debts since they are likely to fall off your credit report after seven years.
When you make your first offer, Portfolio Recovery will counter with a higher amount.
Hopefully, you’ll meet somewhere in the middle between your initial offer and the full amount of the debt.
Whatever Portfolio Recovery agrees to accept, be sure to get the agreement in writing before sending any money.
The letter should specifically indicate that Portfolio Recovery is accepting XX% or $XX in full settlement of the collection balance.
If you fail to get this confirmed in writing, Portfolio Recovery will accept your partial payment, then continue to pursue you for the full balance.
It’s not fair, but it’s the way collection agencies work.
Having the Collection Account Deleted from Your Credit Report Using “Pay-for-Delete”
This is a tactic you can attempt, though there’s no guarantee it will work.
Pay-for-delete is where you make an offer to the collection agency to pay off the debt in exchange for removing the entry from your credit reports completely.
Some collection agencies will agree to do this, but it’s not certain if Portfolio Recovery is one of them, or if they will do it in all circumstances. But it never hurts to ask.
Here’s the problem: they may agree to delete the information from your credit report, but not follow through.
If they don’t, you have no recourse — legal or otherwise.
That’s because pay-for-delete is not a legally recognized process.
Creditors and credit collection agencies are required to report negative credit information. They can’t simply delete negative information unless it’s proven to not belong to you.
Though the collection agency may agree to delete the negative information, it may not happen.
There’s another important piece of information you need to know: even if you do pay off a collection, it will remain on your credit report for seven years from the time the account first became delinquent.
Still, a paid collection is always better on a credit report than an open one. And by paying it off or settling the account, your credit score may take a small bump up.
5. Getting Legal Help if Portfolio Recovery Associates Gets Ugly
It is possible that despite your best efforts and good intentions, Portfolio Recovery refuses to settle with you.
Or worse, they threaten to pursue a judgment against you. If that’s the case, you’ll need to get legal representation.
Especially if the statute of limitations set by your state is nearly over or past.
Fortunately, there are law firms available that specialize in consumer credit issues. One of the best in the industry is Lexington Law.
If the loan amount in question is large, or if the entry on your credit report is particularly damaging, you may need to engage the services of an attorney to level the playing field with Portfolio Recovery.
Portfolio Recovery Associates Contact Information
Here is a little bit more contact information on this debt collection company:
- Address: 120 Corporate Boulevard Norfolk, VA 23502 (also recognized as 120 Corporate Blvd Norfolk, VA 23502)
- Phone Number: Main: 757-519-9300 Toll-free: 800-772-1413
Is Portfolio Recovery Associates Legit?
Never assume an organization isn’t legitimate, especially when it comes to credit. There are all kinds of businesses and agencies that most of us aren’t aware of, at least until we get involved with them. It’s likely most have never heard of Portfolio Recovery Associates until they get a collection call or collection letter.
But Portfolio Recovery Associates is completely legitimate. It’s part of an organization that operates worldwide with more than 5,000 employees. And as a company that buys previously uncollectible debts from various businesses and agencies, they are a major player in the debt collection space. The company even has an “A+” rating from the Better Business Bureau (BBB), the highest rating they issue.
The Consumer Financial Protection Bureau (CFPB) has over 11,000 complaints on record filed against Portfolio Recovery Associates and in some cases, has had state Attorney General’s (California and New York) contacted about multiple violations of consumer rights.
All of which means you should never ignore communication from Portfolio Recovery Associates, however you have multiple legal options to fight against this company.
Should I Pay Portfolio Recovery Associates?
Some consumers quickly pay any collection agency that contacts them.
Their best hope is that by settling quickly with the collection agency — and their multitudes of threats — it will disappear from their lives upon full payment.
Others do their best to ignore them completely.
The best response, however, is something in the middle of the two extremes.
You don’t want to ignore them, because they can pursue a default judgment against you.
And if that judgment is successful — often without you even knowing about it — they can garnish your wages or your bank account.
On the other hand, it may turn out you don’t owe them any money at all.
That should be the first fact you want to uncover.
But if it turns out you do owe the debt, the next strategy is to get Portfolio Recovery Associates to accept less than the full amount requested, while fully settling the debt once and for all.
Helping You Deal with Portfolio Recovery
If Portfolio Recovery is being uncooperative, you may need to take the necessary step of getting legal representation.
What we’ve presented here are specific strategies you can use to remove Portfolio Recovery from your credit report.