Portfolio Recovery Services Lawsuits – Have they sued you?
Have you received a collection letter from Portfolio Recovery Associates? or a telephone call? Have you been sued by Portfolio, either in Magistrate Court or the Court of Common Pleas? Please do not negotiate with them or make a payment to them until you have had a consult with our law firm or with another reputable consumer law firm. The consult is FREE. There are very few instances where I would recommend sending money to Portfolio Recovery and I certainly would never do so without seeking legal advice.
Portfolio Recovery Associates is a company that buys bad debt to try to make a profit. They buy large groups of defaulted credit card accounts for pennies on the dollar (we have seen data that shows that their cost is approximately 1.7 cents on the dollar, though this can change from purchase to purchase) for the sole purpose of attempting to collect whatever they can on those accounts from individuals just like you. They file dozens if not hundreds of lawsuits daily in Pennsylvania in hopes of collecting on old debt claims that have been charged off by the original creditor. As of the date of this writing, mid 2014, they are one of the largest debt purchasers that we deal with. They are so big that they are a publicly traded company…buying bad debt is a very big business and it is very profitable for the buyers.
If the lawsuit is filed in the Court of Common Pleas, then our approach to defending claims filed by Portfolio Recovery is twofold. First, we defend the case based upon a lack of legal sufficiency by filing what are called Preliminary Objections. These Objections are a statement to the court that says “we believe that this lawsuit is defective, and here is why”. Credit card lawsuits are based upon documents. They need these documents, and they need stacks of them. Your lawsuit should be as thick as a small phone book when you receive it, and it should include most if not all of you credit file. Chances are that it is not that thick and it is therefore defective.
If the lawsuit isnt that thick, then its very likely that the lawsuit is legally insufficient, or defective. In my experience, I have found that the lawsuits filed by Portfolio Recovery are usually legally insufficient, at least at the onset of the litigation. We object to these lawsuits on insufficiency grounds with great success. The court, upon receipt of the Preliminary Objections, should agree that the lawsuit is defective and should force PRA to cure those defects (by producing more documentation).
In the event that Portfolio Recovery is able to cure the insufficiency objections, we then move on to defending the claim on its legal merits, i.e. whether you actually had the account, whether you actually defaulted on it, when the alleged default occurred, whether it is filed within the Statute of Limitations, et cetera. This is generally the only time that we consider settlement on a Portfolio case, that is, after they have provided us with substantial documenation showing that they own the specific account and that they can prove the exact amount of the debt. This occurs very infrequently. (Another settlement time would include settling a debt that is very small).
If the lawsuit is filed at your local District Justice or Magistrate, then our approach is slightly different. Magistrate court is a different animal, there are no briefs or motions or written responses to the lawsuits. We simply attend the hearing (you DO NOT) and defend using our instincts, knowledge of the law, and our stacks of precedential case law. PRA will likely not have a witness at this hearing and likely will not have all of the documentation that it needs to prevail. If the judge follows the law, you will win, period. If the judge does not follow the law, then you can appeal and the case can be won at the next level.
Our firm has a great deal of experience in defending credit card collection cases whether they are filed by PRA or not. Credit card lawsuits are serious matters, this is not something that you should try to handle alone. If you have been sued in any Pennsylvania county, by Portfolio Recovery Associates or another collection agency, our firm can help you defend this claim at minimal cost, with a great chance at success. Contact our office here, call me at 412-823-8003 or visit our
Pennsylvania Credit Card Legal Center here.