The majority of the Company's business activities involve the acquisition and collection of portfolios of defaulted consumer receivables. These are purchased from sellers of finance receivables and collected by a highly skilled staff whose job is to locate and contact customers and arrange for payment or some other resolution of their debts. When these efforts are not successful, Portfolio Recovery Associates moves to its legal collection process, which involves either using its own attorneys or contracting with independent attorneys throughout the country to resolve these debts

In addition to its primary business, Portfolio Recovery Associates also services receivables owned by others on either a commission or transaction-fee basis. These clients include entities in the financial services, auto, retail, utility, health care and government sectors. Services in this area include standard collection services on delinquent accounts, obtaining location information for clients in support of their own collection activities (known as skip tracing), and the management of both delinquent and non-delinquent tax receivables for government entities.

The Company's key competitive strengths are its sophisticated, analytical approach to portfolio pricing -- which is critical to assuring that portfolios acquired by the Company can be collected profitably; its strong emphasis on collection personnel, both in terms of efficiency and effectiveness; and its relationships with many of the largest consumer lenders in the United States. The Company's operating philosophy centers on disciplined buying and the efficiency of its collection operations.

Portfolio Recovery Associates was founded in 1996 and became a publicly traded entity through an Initial Public Offering in November 2002. Two of the Company's top executives, Steven D. Fredrickson, Chairman, President and Chief Executive Officer, and Kevin P. Stevenson, Chief Financial and Administrative Officer, are also co-founders of the Company.