If you’re reading this article, you may have recently been contacted by a company called Portfolio Recovery Associates.
Portfolio Recovery is a collection agency that specializes in purchasing old debts from companies who have been unable to collect the debt themselves.
How Portfolio Recovery Associates Works
Generally, Portfolio Recovery will buy large numbers of old debts from companies who have “charged off” the accounts.
In other words, when the original creditor has been unsuccessful in collecting on a debt, they will write it off. This is called a charge off.
However, they can legally sell that debt to a third-party collection agency. This is where Portfolio Recovery comes into play.
Portfolio Recovery will purchase the debt at pennies on the dollar with the gamble that in most cases they’ll be able to collect more from the person who owes the debt than what they purchased it for. This is how they make a profit.
How To Deal With Portfolio Recovery
You may have received either a letter in the mail or a call from Portfolio Recovery. If they call you on the phone, I recommend telling them that you know your rights under the Fair Debt Collection Practices Act, and that all future communication should be done via mail.
One of the biggest mistakes I see people make is that they deal with collection agencies over the phone and end up getting in a situation where the collection agency agrees to something, but since it’s not in writing, they don’t really have to follow through on it.
With this in mind, keep it simple and do all your business with Portfolio Recovery by mailed letters. This way you have records of all communications in case you need it in the future or they attempt to sue you.
How Can I Remove Portfolio Recovery Associates From My Credit Report?
Now that we’ve gone through how to deal with these people, here are the 3 most effective ways to remove Portfolio Recovery Associates from your credit report.
- Make Them Prove The Debt Is Yours
- Negotiate a “Pay for Delete” & Offer To Pay Them To Remove The Collection
- Have A Professional Remove The Portfolio Recovery Collection
1. Make Them Prove the Debt is Yours
The easiest way to remove a collection from your credit report is to make Portfolio Recovery prove that the debt is yours.
Under the Fair Debt Collection Practices Act, you have the right to request that a company attempting to collect on a debt validate that the debt is indeed yours.
The good news is that since you’re not dealing with the original creditor, but rather Portfolio Recovery who bought the debt, it’s more likely that they will be unable to validate the debt. This is because the information they have about the debt might not be accurate or complete.
The downside is that you only have 30 days from the first time they contacted you to demand that they validate the debt. If it’s been beyond 30 days, it will be more difficult to use this method.
You should use my sample debt validation letter and send it to them as quickly as possible. If they are unable to validate the debt, they’ll have to stop attempting to collect on the debt and remove it from your credit report.
2. Offer to Pay Them to Remove the Collection
When you’re unsuccessful with the debt validation method, or it’s been over 30 days, your next option is to offer to pay the debt in order to remove the collection from your credit report.
You don’t always need to offer to pay in full. In fact, since Portfolio Recovery likely purchased the debt for much less than what they are attempting to collect, it’s very likely that you will be able to negotiate with them. I would start at 50% of what they are asking and go from there.
Again, when using this technique make you get everything in writing and never do this over the phone. Also, never give them access to your bank account.
When you have both agreed on an amount, write them a check. You’ll want to follow up in 30 days to make sure that they have removed the collection from your credit report. If they haven’t, write them another letter demanding that they fulfill the agreement.
3. Have a Professional Remove the Portfolio Recovery Collection
Sometimes, you are just over the hassle of it all and would prefer to leave it in the hands of a professional. If you’re the type of person, I suggest you check out Lexington Law Credit Repair.