Why Is Portfolio Recovery Calling Me

Receiving a call from Portfolio Recovery Associates (PRA) can be unsettling. It's essential to understand why they are contacting you and how to respond appropriately. This article provides information on the reasons behind PRA's calls and outlines responsible steps to take.

Understanding Portfolio Recovery Associates

Portfolio Recovery Associates, LLC (PRA) is a debt collection company. They purchase defaulted debts from various creditors, including banks, credit card companies, retail stores, and utility providers. These debts are often sold at a fraction of their original value, and PRA attempts to collect the full amount from the debtors.

PRA is a publicly traded company and operates within the legal framework of debt collection laws, including the Fair Debt Collection Practices Act (FDCPA). While they are a legitimate business, it is important to understand your rights when dealing with them.

Reasons for Receiving Calls from Portfolio Recovery

The primary reason PRA is calling you is because they believe you owe a debt they now own. This debt could stem from a variety of sources:

Unpaid Credit Card Debt

Credit card debt is a common type of debt purchased by collection agencies. If you have past-due credit card accounts, the original creditor may have sold the debt to PRA.

Delinquent Loans

Personal loans, auto loans, and other types of loans that have fallen into default can also be purchased by PRA. Default typically occurs after a period of non-payment, as defined in the loan agreement.

Medical Bills

Unpaid medical bills are frequently sold to debt collectors. Even if you had insurance coverage at the time of service, outstanding balances (co-pays, deductibles, or uncovered services) can end up in collections.

Utility Bills

Unpaid utility bills, such as electricity, gas, water, or internet services, can also be sold to debt collection agencies like PRA.

Other Debts

PRA may also attempt to collect on other types of debts, including debts from retail stores, phone companies, and other service providers.

Verifying the Debt

Before making any payments or acknowledging the debt, it is crucial to verify that the debt is legitimate and that you are the correct debtor. The FDCPA provides you with the right to request verification of the debt.

To verify the debt, send a written request to PRA via certified mail with return receipt requested. This provides proof that they received your request. Your request should include:

• Your name and address
• The account number (if known)
• A statement requesting validation of the debt
• A request for the original creditor's name
• A request for documentation proving you owe the debt

PRA is legally obligated to provide you with the following information:

• The amount of the debt
• The name of the original creditor
• A statement that if you dispute the debt in writing within 30 days, PRA will obtain verification of the debt.
• A statement that if you request the name and address of the original creditor within 30 days, PRA will provide it.

If PRA cannot provide sufficient documentation to verify the debt, you are not legally obligated to pay it. Even if they provide some documentation, carefully review it for accuracy.

Disputing the Debt

If you believe the debt is inaccurate, not yours, or otherwise invalid, you have the right to dispute it. This is a critical step in protecting yourself from unfair debt collection practices.

Your dispute should be in writing and sent to PRA via certified mail with return receipt requested. Clearly state the reasons for your dispute and provide any supporting documentation you have.

Common reasons for disputing a debt include:

• Identity theft: The debt is not yours because your identity was stolen.
• Mistaken identity: You are not the person who incurred the debt.
• Incorrect amount: The amount of the debt is wrong.
• Already paid: You have already paid the debt.
• Statute of limitations: The debt is too old to be legally collected.
• Bankruptcy: The debt was discharged in bankruptcy.

Once you dispute the debt, PRA must cease collection efforts until they provide verification of the debt. If they fail to do so, they are violating the FDCPA.

Dealing with PRA's Communication

The FDCPA regulates how debt collectors can communicate with you. Understanding these regulations is essential for protecting yourself.

Communication Frequency

Debt collectors are generally prohibited from calling you repeatedly or harassing you. While there is no specific limit on the number of calls, excessive calling can be considered harassment.

Communication Times

Debt collectors cannot call you before 8:00 a.m. or after 9:00 p.m., unless you give them permission to do so.

Prohibited Communication Tactics

Debt collectors are prohibited from using abusive, deceptive, or unfair practices, including:

• Threatening you with legal action they cannot or do not intend to take.
• Using obscene or profane language.
• Misrepresenting the amount of the debt.
• Contacting third parties (other than your spouse or attorney) about your debt without your permission.

Cease Communication Request

You have the right to request that PRA stop contacting you altogether. To do so, send them a written request (again, via certified mail). Once they receive your request, they can only contact you to acknowledge your request or to inform you that they intend to take legal action.

Negotiating a Settlement

If you acknowledge the debt and want to resolve it, you may be able to negotiate a settlement with PRA. Often, debt collectors are willing to accept a lower amount than the full balance owed.

When negotiating a settlement, keep the following in mind:

• Get the settlement agreement in writing before making any payments. The agreement should clearly state the amount you will pay and that this payment will satisfy the debt in full.
• Consider offering a lump-sum payment, as this may be more appealing to PRA.
• Be realistic about your ability to pay. Don't agree to a payment plan you cannot afford.

Be aware that settling a debt for less than the full amount can negatively impact your credit score. However, it may be a better option than allowing the debt to remain unpaid.

Statute of Limitations

Each state has a statute of limitations on debt, which is the period of time a creditor or debt collector can sue you to collect a debt. The statute of limitations varies by state and by the type of debt.

Once the statute of limitations expires, the debt becomes "time-barred," meaning a creditor can no longer sue you to collect it. However, the debt still exists, and the creditor can still attempt to collect it voluntarily.

Important Note: Making a payment on a time-barred debt or acknowledging the debt in writing can revive the statute of limitations, giving the creditor a new period of time to sue you.

Seeking Professional Help

If you are struggling to deal with PRA or other debt collectors, consider seeking professional help from a credit counselor or attorney.

A credit counselor can help you develop a budget, understand your credit report, and explore debt management options. An attorney specializing in debt collection defense can advise you on your legal rights and represent you in court if necessary.

Key Takeaways

Dealing with Portfolio Recovery Associates requires a proactive and informed approach. Here are the key takeaways:

• Verify the debt: Always request validation of the debt in writing.
• Dispute inaccuracies: If you believe the debt is incorrect, dispute it immediately.
• Know your rights: Understand your rights under the FDCPA and other debt collection laws.
• Document everything: Keep records of all communication with PRA.
• Consider professional help: If you are overwhelmed, seek assistance from a credit counselor or attorney.

By understanding your rights and taking appropriate action, you can effectively manage communications with Portfolio Recovery Associates and work towards resolving any outstanding debts.