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Portfolio Recovery Associates Gets Tough on Debt Settlement Companies

A debt settlement insider forwarded over to [email protected] the following fax they received from Portfolio Recovery recently. It appears the Portfolio Recovery is getting tough with settlement companies and law firms.

The correspondence from Joseph Hood III even says that effective 3-1-2012 Portfolio Recovery will no longer generate agreement letters for arrangements. That could be terribly dangerous for consumers if there is not a written agreement in place before any settlement payments are sent.

Portfolio Recovery is asking companies to complete the following questionnaire. The questions are certainly very leading and appear to be an effort for Portfolio Recovery to cover their ass(ets). It actually reminds me a lot of what credit counseling groups were asked to complete at one time.

Please complete this questionnaire and return it to the email addressed below within 5 days.

  1. What do you charge for this service to our customers and when is it due?
  2. Do you have a POA on file for each account and mutual client?
  3. If we do not agree to the settlement offer, will you be sending us the signed Cease and Desist on the account?
  4. Are your employees allowed to work from home? If yes, please provide a summary of the security controls in place.
    • How are your employees vetted?
    • Do they undergo background checks?
  5. Tell us about data security;
    • How do you plan to get data back and forth and confirm that you can execute with our security parameters.
  6. Tell us about any litigation that you have had or have related to your business.
  7. Have you ever been a party to an enforcement from any regulatory authority? – Source

It’s interesting they ask about the cease and desist letter and that they inquire about fees. Presumably some decision will be made about working with some companies based on fees. I can see how they may elect to not work with enrolled debt fee companies or advanced fee companies if they perceived it would cut into their recovery.

It’s interesting that Portfolio Recovery was interested about vetting and background checks but only for employees working from home. You would have thought those questions would have applied to all employees and officers. Especially with the number of people with felonies or convictions working in the debt relief industry. In fact I was tipped to one yesterday that is currently on probation but running a debt relief agency.

Portfolio Recovery Settlement Terms


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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Pralies

     This is old news and irrelevant.  No DSC responded, much like the letters sent from B of A and other Major banks over the last 6 months.

    PRA saw a significant decrease in overall settlement volume and immediately backed down from their posture.  Ill upload and send to you written settlement letters from the last 2 weeks.

    • Steve Rhode

      It might be old news but the notice from Portfolio Recovery is dated within the past few days.

      So are you saying their request doesn’t matter and is just a bluff and should be disregarded?

      • Rob2D2

        Not sure if it’s a bluff, but they’re still settling and we’re not telling them how much we charge (Our company does not take advance fees… no way we’re telling them the fee is based on savings) 

      • Gfregreg

        I think most DSC’s did. That letter was sent to big back ends twice last year. Whoever sent to you is a guppy in the ocean.

        B OF A tried the same stunt last summer. Then we all stopped taking calls and told there collectors to tell there bosses it wasn’t gonna be ball in their court.

        B OF A takes 15-28% all the time.

      • Steve Rhode

        So the way t deal with these types of request is to just disregard them because they are pointless?

      • Pralies

        All requests have a point or some sort of goal.

        Here is what could have happened.  Some analysts looked at collection stats and decided that pre-debt-relief-industry the amount collected was much higher than before.  So they decided to make things more difficult for DSC’s to work with them.  In the form of “requirements” to settle with us.

        However the big dogs upstairs aren’t on the battlefield or the call centers where the settlement’s are going on.  Then they pass the info along to the collection floor of agents.  What collector on a bonus structure is going to cut out 60% of their collection revenue by not working with their contacts at negotiation’s offices of DSC’s?

        The month following the decision collection numbers drop and when they dig into why…. they give up on their “requirements”.

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