How Many Reasons do Courts Have to Show Favoritism to Debt Buyers? About a Hundred Million Reasons.

Old credit card debt is often sold to a junk debt buyer for pennies on the dollar. The debt buyer makes approximately 30% of its revenue from alleged debt collected through legal proceedings. A vice president for one of the most active debt buyers in the nation, Portfolio Recovery Associates, LLC, said of the judgements obtained, 90% are by default.

Some of the no shows owe the debt. But many cannot take off work, don’t understand the process, do not actually receive a summons, or may even be dead.

But PRA is notorious for bringing actions against alleged debtors on debt that cannot be verified, and even worse, that PRA knows is from inaccurate records. The majority of the time that an alleged debtor shows up to court, the case is dismissed. Ooops, says PRA, my bad.

Why do the judges not require the unopposed debt buyer to show at least a minimal amount of old account level documentation that shows when debt was supposedly incurred and where? This is as simple as showing the account statements from the last time the account was zero until it was at the current balance.

The judge would not need to look at every entry. A spattering would do.

Call me a cynic. I think the courts like the income from the litigious collectors.

Portfolio Recovery Associates is a wholly owned subsidiary of PRA Group, Inc, a publicly traded company that has the symbol PRAA.

In PRA Group’s consolidated financial statement for 2021, Total Portfolio Revenue shows as $1,073,231,000. Of that, $78.3 million was “costs paid to courts where a lawsuit is filed for the purpose of attempting to collect on an account.” In 2020, the costs paid to courts was over $100,000,000, about 9% of revenue.

I’m not saying a debt buyer walks into a judge’s chambers with a briefcase full of cash and walks out empty handed.

I’m just wondering if the courts would put a little more consideration into their decisions if it was the alleged debtor who kept the court lights on and paid the staff’s salaries.