Portfolio Recovery Associates is one of the largest debt buyers in the United States. If you have received a letter or a lawsuit from PRA, it means they purchased your defaulted account — most likely a credit card, personal loan, or retail account — from the original creditor for pennies on the dollar. They now own the account and stand in the shoes of the original creditor with the right to collect. You have rights. PRA must follow the same federal and California laws that apply to every debt collector. And the fact that they bought the account cheaply gives you real leverage. But that leverage disappears if you ignore them.
Who Is Portfolio Recovery Associates?
Portfolio Recovery Associates, LLC (PRA) is a subsidiary of PRA Group, Inc., one of the largest publicly traded debt buying companies in the world, headquartered in Norfolk, Virginia. PRA purchases portfolios of defaulted consumer accounts — primarily credit card accounts from major banks — and attempts to collect the full balance plus accrued interest and fees.
PRA is licensed to collect debt in California under the Debt Collection Licensing Act, Financial Code § 100000 et seq. You can verify their license status through the Nationwide Multistate Licensing System (NMLS) Consumer Access at nmlsconsumeraccess.org. As a debt buyer and collector, PRA is subject to the federal Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq., and California’s Rosenthal Fair Debt Collection Practices Act, Civil Code § 1788 et seq. Violations of either statute expose PRA to liability for actual damages, statutory damages up to $1,000, and attorney’s fees. 15 U.S.C. § 1692k; Civil Code § 1788.30.
PRA has a significant and documented enforcement history. In September 2015, the Consumer Financial Protection Bureau ordered PRA to pay more than $27 million for collecting on unsubstantiated debt, filing misleading affidavits in court, and suing consumers on time-barred debt. Read the 2015 CFPB consent order. In March 2023, the CFPB filed a second enforcement action alleging PRA violated the terms of the 2015 order — again suing on time-barred debt, collecting without required documentation, and threatening legal action without possessing required documentation — resulting in an additional $24 million in penalties and consumer relief. Read the 2023 CFPB enforcement action.
How PRA Collects Accounts
After purchasing an account portfolio, PRA sends written notices identifying themselves as the new owner of the account and demanding payment. Under 15 U.S.C. § 1692g, PRA must send you a written validation notice within five days of first contact identifying the original creditor, the amount claimed, and your right to dispute. If you dispute in writing within 30 days, PRA must cease all collection activity until it provides written verification.
If initial contact does not result in payment or a payment arrangement, PRA may escalate to litigation. PRA files a significant volume of lawsuits in California courts. Like other high-volume debt buyers, their cases are often handled by collection law firms with minimal individual case review — which creates opportunities for defendants who know what to look for. California Civil Code § 1788.17 incorporates the FDCPA’s requirements and applies them to all collection activity in California.
Can Portfolio Recovery Associates Sue You in California?
Yes. PRA files lawsuits regularly in California limited civil court for balances under $35,000 under CCP § 85, and in unlimited civil court for larger balances. But to prevail, PRA must prove under California Evidence Code § 500 that they own the account, that the account is valid, that the amount claimed is accurate, and that the lawsuit was filed within the applicable statute of limitations.
The statute of limitations on a written contract in California is four years under CCP § 337. The clock typically runs from the date of your last payment or first delinquency on the original account. The CFPB’s 2015 and 2023 enforcement actions against PRA both specifically cited suing on time-barred debt as a violation. If PRA files suit after the four-year window has closed, you have an affirmative defense — but you must raise it in your written response. It will not be raised for you.
If you are served with a lawsuit from Portfolio Recovery Associates, that is the moment to act.
Learn how to respond to a debt collection lawsuit in California →
PRA’s Documentation Problems
Like all debt buyers, PRA purchases accounts in bulk. Under California law, an assignee must prove a complete chain of title from the original creditor. Cal. Comm. Code § 9203. California’s Fair Debt Buying Practices Act, Civil Code § 1788.52, imposes additional documentation requirements on debt buyers — including requiring them to possess the debt purchase agreement, a copy of the original contract, and account statements — before filing suit. The CFPB’s enforcement actions against PRA specifically found that PRA collected on unsubstantiated debt and filed suit without possessing required documentation. Demanding that PRA prove its case — rather than simply accepting the account as valid — is one of the most effective strategies available to defendants.
In California litigation, a plaintiff must prove its case by a preponderance of the evidence under Evidence Code § 115. If PRA cannot produce the original agreement, account statements, or a complete chain of assignment, it may not be able to meet that burden.
Settling With Portfolio Recovery Associates
PRA regularly settles accounts for less than the face amount. Because they purchased the account at a steep discount, they have significant room to accept reduced payment and still profit. Any settlement is governed by California contract law and must be supported by consideration. Civil Code § 1521.
Before a lawsuit, settlements of 40% to 60% of the balance are common. After a lawsuit is filed, PRA may still settle — but your leverage is strongest before a default judgment is entered. Any forgiven balance over $600 may be reported to the IRS as income on a 1099-C under 26 U.S.C. § 6050P. Get any settlement agreement in writing before paying anything. The agreement should state the amount being paid, that it constitutes full satisfaction of the account, and that PRA will report the account as satisfied to the credit bureaus under 15 U.S.C. § 1681s-2.
Your Rights When Dealing With PRA
PRA must comply with the FDCPA and the Rosenthal Act in every aspect of their collection activity. Under 15 U.S.C. § 1692c, they cannot contact you at unreasonable hours or after receiving a written cease communication demand. Under § 1692d, they cannot harass or abuse you. Under § 1692e, they cannot make false or misleading representations about the account. Under § 1692f, they cannot use unfair or unconscionable means to collect.
California Civil Code §§ 1788.10–1788.16 sets out additional prohibited conduct under the Rosenthal Act. If PRA violates any of these provisions, you may have a claim for actual damages, statutory damages up to $1,000, and attorney’s fees. 15 U.S.C. § 1692k; Civil Code § 1788.30. The one-year statute of limitations under the FDCPA runs from the date of the violation. § 1692k(d).
Frequently Asked Questions
Is Portfolio Recovery Associates a scam?
No. PRA is a legitimate and licensed debt buyer. However, they have a documented history of illegal collection practices — including suing on time-barred debt and collecting without required documentation — for which the CFPB imposed more than $51 million in penalties across two enforcement actions in 2015 and 2023. The fact that they are legitimate does not mean you owe what they claim or that they can prove it in court.
What happens if I ignore Portfolio Recovery Associates?
If PRA has filed a lawsuit and you do not respond, the plaintiff can request a default judgment and the court may grant it. That judgment can be used to garnish your wages under CCP § 706.050, levy your bank account under CCP § 700.140, or place a lien on your property under CCP § 697.310. Ignoring a lawsuit is the worst possible response.
Can PRA garnish my wages in California?
Only after obtaining a court judgment. PRA cannot garnish your wages without first suing you and winning. Even then, California law caps garnishment at 25% of your disposable earnings or the amount exceeding 40 times the state minimum wage — whichever is less. CCP § 706.050.
How long does PRA have to sue me in California?
Four years from the date of your last payment or first delinquency on the original account, under CCP § 337. PRA has a documented history — confirmed by two CFPB enforcement actions — of filing suit on time-barred accounts. If they file after the four-year window, the account is time-barred — but you must raise that defense in your written response.
Can I settle with PRA after they sue me?
Yes. PRA settles cases regularly even after filing suit. Your leverage is strongest before a default judgment is entered. Get any settlement agreement in writing before making any payment, and confirm the agreement states payment constitutes full satisfaction of the account.
Legal references: 15 U.S.C. § 1692 et seq. (FDCPA); 15 U.S.C. § 1692k; California Civil Code § 1788 et seq. (Rosenthal Act); California Civil Code §§ 1788.30, 1788.52; California Financial Code § 100000 et seq.; California Code of Civil Procedure §§ 85, 337, 697.310, 700.140, 706.050; California Evidence Code §§ 115, 500; California Commercial Code § 9203; California Civil Code § 1521; 26 U.S.C. § 6050P; 15 U.S.C. § 1681s-2. CFPB Enforcement: In re Portfolio Recovery Associates, LLC (Sept. 2015); CFPB v. Portfolio Recovery Associates, LLC (Mar. 2023).