Portfolio Recovery Associates Lawsuits – Have they sued you?
Portfolio Recovery Associates (otherwise known as PRA) is one of the big 2 junk debt buyers that we deal with. Between Midland Funding and Portfolio Recovery, those two companies account for over 60% of our new client inquiries on credit card lawsuits. They are big and they are good. In recent cases that we’ve defended, they are producing more and more documentary evidence in a quest to win every case.
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 consultation is FREE and there is no obligation to hire us. Don’t make the mistake of calling Portfolio Recovery first and then calling a consumer attorney second. There are very few instances where I would recommend sending money to Portfolio Recovery and I certainly would never do so without first seeking legal advice.
Who is PRA?
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. PRA files dozens 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, August 2018, they are one of the largest debt purchasers that we deal with. They are so big in fact that they are a publicly traded company…buying bad debt is a very big business and it is very profitable for the buyers.
How Do We Defend Portfolio Cases?
A Portfolio Recovery lawsuit is typically filed in the Court of Common Pleas. Our approach to defending these claims is typically by filing preliminary objections. In almost every claim that I have encountered with Portfolio the lawsuit was defective, at least at the initial filing. We make a statement to the court that says “we believe that this lawsuit is defective, and here is why”. Credit card lawsuits are based upon certain 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 your credit file. Necessary documents include Contracts, Terms and Conditions, Monthly Statements and Assignments, among other documents. Chances are that the lawsuit is not that thick and it is therefore defective. The amount of documentation that is necessary varies from county to county.
In almost every instance, the court agrees with us that the lawsuit is legally insufficient. In most cases, the court makes a ruling that Portfolio has to produce more documentation before it can move forward.
In the event that Portfolio Recovery Associates 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 documentation 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 or if they have already obtained a judgment against you).
If Portfolio is NOT able to cure the defects, then the case is over. This is a frequent result for our clients on these types of cases though it must be said that no law firm wins 100% of its cases so we cannot guarantee any certain result for you.
What About District Justice Cases?
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 potentially be won at the next level. At the time of this writing Portfolio rarely initiates cases at the District Justice level.
Our firm has a great deal of experience in defending credit card collection cases whether they are filed by Portfolio Recovery 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 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.