This is the DRAFT of regulatory complaint #2 about Portfolio Recovery Associates.
Portfolio Recovery Associates is a debt buyer notorious for violating the FCRA and FDCPA, ignoring consumer disputes and even multiple hard inquiries.
While the FCRA explicitly PERMITS collection inquiries to be reported to 3rd parties (hard inquiries), this practice defames consumers who are often INNOCENT. Collectors and debt buyers utilize credit reports to LOCATE debtors and OFTEN the consumers had no opportunity to dispute the alleged debts.
All too often collectors obtain the credit reports of truly innocent parties in error or for discharged accounts.
While it is debatable whether debtors with valid debts deserve to be punished by multiple FICO score lowering credit inquiries, I can’t see ANY argument to allow collectors to lower the FICO scores of consumers who do NOT owe the alleged debt.
- The FCRA must be changed to prohibit the reporting of collection inquiries to 3rd parties.
When I spoke to Portfolio Recovery collector James, he falsely stated that PAYING collections would improve the credit.
Of course this is totally FALSE, as a collection reported as such will NOT get you a single FICO score point when updated to “paid.”
As I pointed out in my 5/28/09 fax to the Portfolio compliance department, they should lobby legislators to change the law. Legislators should MAKE Fair Isaac change the FICO scoring formulas, require DELETION of collections after payment/settlement or even better, prohibit FICO scoring entirely. After all, everybody ought to know by now that FICO scoring doesn’t PREDICT defaults, but CAUSES defaults and it greatly contributed to the mortgage crisis.
Not only is there NO incentive for consumers to pay/settle valid collections, but it will likely PERMANENTLY damage their credit rating.
In fact, once a collection is settled, chances of deletion are severely lowered. I recommend that consumers wait for reported collections to be assigned/purchased by a NEW collector. The old collector has to delete and then they can settle BEFORE the new collector reports on the credit.
Why do they make it SO difficult for consumers to PAY their debts?
Obviously, the primary goal is NOT to collect the debts, but to PERMANENTLY destroy the credit rating of GOOD people!
Since a STATE AG complaint is more likely than the FTC complaint to result in an investigation and hopefully legislative changes, I will also send the complaint to my client’s state AG as well as Portfolio’s state AG.
It is truly outrageous that Portfolio Recovery didn’t even bother to respond to my previous fax.
Here is the DRAFT complaint:
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