content_image/191399.jpg content_image/191408.jpg
<img src='content_image/191399.jpg'>

management changes in both businesses, and we are diligently employing process and technology resources that have served us well in the debt- purchase business. Our fee businesses offer oppor- tunities for solid growth without significant capital investment, and we are focusing on developing them into highly profitable, sustainable enterprises over the long term. 

I strongly believe that intelligent diversification is a key to Portfolio Recovery Associates’ continuing success. This belief is what led us to enter the bankruptcy market, though we knew at the onset that patience would be required to achieve significant success, and it is what is guiding us now in building an impressive portfolio of fee-for-service businesses. Ultimately, building a diverse group of enterprises selling to different markets and exposed to different economic and pricing cycles should enable us to deliver superior long-term results through a wide variety of conditions. 

Regulation and compliance continued to be front- burner items for us throughout 2010. Although nothing specific to our industry has yet emerged from the newly created Consumer Financial Protection Bureau, it is clear that additional regulation of the industry is likely. We believe PRA is an industry leader in the compliant conduct of all aspects of collection operations, including the litigation process. In handling and reviewing account documentation, we employ what we believe are rigorous, industry-leading stan- dards. We continue to study and refine them, setting the bar even higher for the industry. During 2010, this included making a significant investment in technology that provides sophisticated speech analytics for all telephone conversations, to ensure that we’re in compliance with PRA’s policies and procedures as well as industry standards. 

Unfortunately, the proliferation of blogs and other social media outlets has spawned a number of one-sided, often misguided, and frequently unsub- stantiated posts or stories about the debt-purchase industry. Some of those posts have mentioned PRA. The irresponsible, and many times outright inaccu- rate, views expressed have even leaked into the traditional press. The fact is that the debt-purchase business plays a critical role in the consumer credit industry that is so essential to the health of the U.S. economy. Without a reasonable and well-run enforce- ment mechanism, the consumer credit market cannot function. PRA and firms like it in the collection industry work every day with defaulted consumers to voluntarily resolve unpaid bills. Although litigation is never our first choice for enforcing a debt, when we go down this path we take great care to ensure proper service, documentation, balances, and venue. 

Our challenge for 2011 is to carry forward the fabu- lous momentum we developed in 2010. We seek to strengthen the operations and sales capabilities of our fee-for-service businesses, while leveraging our expertise and market position in both bankruptcy and core debt purchases. Thank you for your con- tinued support of PRA through your ownership of our stock. I assure you that the employees at Portfolio Recovery Associates are working very hard to maximize your investment and retain your trust. 

Sincerely, 

<img src='content_image/191408.jpg'>

