HORROR DEBT
Before you invest in Portfolio Recovery Associates (PRAA). Please read this Businessweek Article.
http://www.businessweek.com/magazine/content/07_46/b4058001.htm
This underscores why it's so important to learn as much about companies before investing.
I personally would not be comfortable with PRAA unless I can get reassurances they don't engage in the shady practices discussed in the article.
Before you invest in Portfolio Recovery Associates (PRAA). Please read this Businessweek Article.
http://www.businessweek.com/magazine/content/07_46/b4058001.htm
This underscores why it's so important to learn as much about companies before investing.
I personally would not be comfortable with PRAA unless I can get reassurances they don't engage in the shady practices discussed in the article.
posted by Shegun at
8:29 AM
4 Comments:
How can a company legally collect debt that has been discharged? Why isn't that a criminal violation? I can see why a company would try to get away with it if it could. I am just surprised that Capital One's "punishment" was restitution and not a crime under RICO or some other white collar criminal statute.
That's the problem.
The law leaves a loophole that plays on the boundary.
I don't want a company in which the leaders are fine with playing on the edge of legality.
I am not saying PRAA is, but if I can't know their business enough to have that kind of assurance, then I need to find other opportunities.
You don't have to dig too hard into PRAA's 10Q and 10K filings to see that they're objective is to collect on Chapter 13 filings, which are filings where people have had court-ordered payment plans put into place. I am sure that some of their accounts do go into Chapter 7 bankruptcy and they can't collect on them. However, PRAA's approach is to focus on those people that are capable of paying off their debts but don't want to - "the won't pays" and not on squeezing money out of those people that don't have the ability to pay anything - "the can't pays." When PRAA buys bankruptcy paper (Chapter 13) they're basically earning the premium for patiently waiting for accounts to have payment plans set-up and paid-out... the previous owners of the debts are willing to take less than full-value in return for an immediate payment.
Anyone who wants to invest in PRAA should read the reports and filings and come to that conclusion for themselves.
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