Portfolio Recovery Associates Lawsuit: What to Do If You’re Being Sued or Contacted
If you’ve been contacted by Portfolio Recovery Associates, you’re likely dealing with a debt they claim you owe. That contact may come as a phone call, a letter, or in some cases, a lawsuit.
Portfolio Recovery Associates is a debt buyer that purchases unpaid debts from creditors. They typically buy these accounts for pennies on the dollar and then attempt to collect the full balance to generate a profit.
Because these debts are often sold in bulk and may be several years old, common issues can arise, such as collection activity on paid accounts, incorrect balances, or attempts to collect from the wrong person.
In this article, you’ll learn why Portfolio Recovery Associates may be contacting you, what it means if they file a lawsuit, and how to respond depending on your situation. You’ll also learn what your options may be under federal law if Portfolio Recovery Associates acts improperly when collecting or reporting a debt.
Why Portfolio Recovery Associates is Contacting You
If Portfolio Recovery Associates is contacting you, it’s usually because they are attempting to collect on a debt they claim you owe. The initial contact often comes through a letter or a phone call. The phone number 866-940-7640 has been associated with Portfolio Recovery Associates, so if you’ve received calls from this number, it is likely them.
Sued by Portfolio Recovery Associates?
Responding to a Portfolio Recovery Associates Lawsuit
If you’ve been sued by Portfolio Recovery Associates, the first thing you should focus on is responding to the lawsuit. If you fail to respond, the court may enter a default judgment against you. A judgment can allow Portfolio Recovery Associates to pursue collection through legal means, such as wage garnishment, bank restraints, or other remedies, depending on your state.
How much time you have to respond will vary by state, but the deadline typically begins when you are formally served with a summons and complaint. In some states, these documents may be called something different, but they serve the same purpose.
Responding is usually done by filing an answer with the court, where you address the allegations and preserve your defenses. This process can feel overwhelming to handle on your own, but there are resources available. For example, you may choose to work with a consumer defense attorney, or explore nonprofit legal aid organizations that assist with preparing answers. There are also private tools, such as SoloSuit, that help generate answers for a fee.
Even if you believe the debt is valid, it is generally still important to file a response. Doing so can help you avoid a default judgment and require Portfolio Recovery Associates to prove their case in court.
How Portfolio Recovery Litigation Typically Works
If an answer is not filed, Portfolio Recovery Associates will likely pursue a default judgment as discussed above. If you do file an answer, then this is no longer an option for them, and they must now prove their claim in court.
In consumer debt cases where a debt buyer is involved, this is not as straightforward as when an original creditor files the lawsuit. Because these debts are often purchased from other companies, the documentation can sometimes be incomplete or inaccurate. That can create issues with proving ownership of the account or the correct balance.
This can influence how the case moves forward, including whether it is resolved through settlement or continues through the court process toward trial or judgment.
How to Fight Portfolio Recovery Associates
If Portfolio Recovery Associates is attempting to collect a debt from you, there are several approaches you may be able to use depending on your situation. The best path will depend on your specific circumstances and how Portfolio Recovery Associates handled the purchase and collection of the account.
Request Debt Validation from Portfolio Recovery Associates
Under the Fair Debt Collection Practices Act (“FDCPA”), you may have the right to request validation of a debt. This generally requires a debt collector to provide information showing that the debt belongs to you, that the amount is accurate, and that they have the ability to collect it.
This can be especially important when a debt buyer is involved, because they may not have complete documentation. Accounts are often purchased in bulk from creditors, and the transfer of information may not always be complete or accurate.
One way to make this request is by sending a written debt validation request to Portfolio Recovery Associates (or to any third-party collector acting on their behalf). Timing can matter, as certain rights are triggered if the request is made within a specific period after initial contact.
When a timely validation request is made, the debt collector is generally required to pause collection efforts until they provide a response. This does not necessarily prevent a lawsuit from being filed, but it can stop ongoing collection communications until validation is provided.
When You May Be Able to Sue Portfolio Recovery Associates
When dealing with Portfolio Recovery Associates, the best defense is sometimes going on the offensive. The FDCPA places limits on what debt buyers and debt collectors can do when collecting on debts. If Portfolio Recovery Associates violates those rules, it may give rise to potential claims under federal law.
When potential violations are present, they may provide leverage when evaluating how to address the debt, including in discussions about settlement. The most common issues to pay attention to include:
Too many calls – The “7-in-7” rule generally limits collectors to no more than seven calls within seven days about a specific debt.
Calls at inconvenient times – Collectors generally cannot call before 8 a.m. or after 9 p.m. in your local time zone.
Harassing or abusive conduct – Yelling, insults, or repeated calls made with the intent to annoy or harass are not permitted.
Improper legal threats – Collectors cannot threaten lawsuits, wage garnishment, or bank levies unless those actions are actually intended and legally permitted.
False or misleading statements – Collectors cannot misrepresent the amount of the debt, their identity, or the legal consequences of nonpayment.
Failure to provide required disclosures – Debt collectors must identify themselves and include the required “Mini Miranda” disclosure when communicating about a debt.
Improper third-party contact – Collectors cannot disclose your debt to family, friends, or employers. They may only contact others to locate your contact information.
If any of these issues are present, they may affect how you decide to handle the situation and what options may be available to you.
Can Portfolio Recovery Associates be Removed from your Credit Report?
If the information on your credit report about the debt is accurate, Portfolio Recovery Associates may be permitted to report it. Issues arise when the information is inaccurate, incomplete, or reported beyond the allowable time period.
The federal law that governs credit reporting is the Fair Credit Reporting Act (“FCRA”). Any entity that furnishes information to the credit bureaus must comply with the FCRA. If they fail to do so, it may give rise to potential claims under federal law.
Because these debts often pass through multiple owners, errors can occur. It is good practice to carefully review your Portfolio Recovery Associates tradeline to ensure it is accurate.
Pay close attention to the balance, status, and any remarks associated with the tradeline. Keep in mind that delinquent accounts generally cannot be reported for longer than seven years from the date of first delinquency, so it can be important to review the timing of the account.
If you believe Portfolio Recovery Associates is reporting information that is inaccurate or outdated, you may have the ability to dispute it with the credit reporting agencies. Once a dispute is submitted, the credit reporting agencies are generally required to investigate and respond. If the information cannot be verified or is found to be inaccurate, it may be corrected or removed.
If the issue is not resolved after a dispute, you may have the right to file a lawsuit under the FCRA if the reporting is inaccurate and not properly investigated.
Talk to a Consumer Protection Attorney
Even if you believe the debt is valid, debt collectors and debt buyers are still required to follow federal law when contacting you and reporting information about your account. Issues can arise at any stage of the process, whether it’s how the debt is being collected, how it is reported, or how disputes are handled.
If you are dealing with repeated calls, a lawsuit, or inaccurate information on your credit report, it may be helpful to have your situation reviewed to understand what options may be available.
At Reznik Consumer Law, the focus is on helping consumers identify when something may have gone wrong and what steps can be taken in response. If you’d like to discuss your situation, you can reach out for a free case review.