Sept. 22--NORFOLK -- This is how debt collection sounds:
Cheers from a group in one corner of the call center. The clack of a spinning noisemaker in another. A jingling tambourine. Every five to 10 minutes, the clamor signals that a consumer somewhere agreed to pay money owed.
"She just made her goal," a supervisor boasts of one of her collectors. "She got a payment for $4,400."
That payment caps a process that Portfolio Recovery Associates has refined into a fast-expanding business. At its headquarters in an office park off Military Highway, the company buys portfolios -- pools of consumer debt -- from banks that no longer want them, paying pennies for each dollar left on those accounts. Through letters, phone calls, lawsuits against debtors or claims filed in bankruptcy court, PRA tries to recover a few cents more per dollar on that debt.
All those pennies added up to a $126.6 million profit last year -- 10 times what PRA earned a decade earlier. And its investors expect more growth.
They've bid shares of the company to record highs this year and to a stock market value of $3 billion.
In Hampton Roads, that supports about 1,400 jobs, out of a companywide total of more than 3,300.
Many people picture debt collectors as money-grubbers, relentlessly hounding people in financial trouble. Some consumers accuse PRA, the nation's biggest publicly traded debt buyer, of pushing too hard. But its executives insist that the company doesn't owe its success to pressuring debtors.
Instead, they say, the key is restraint. Specially designed software helps the company pinpoint the consumers who are worth the expense to pursue and go after them when the time is right.
Almost everyone else, PRA leaves alone. It owns more than 33 million accounts but, in any month, brings in payments from just 2 percent of them.
"Let's face it," says Steve Fredrickson, the company's co-founder and CEO, "if you're a consumer that's in dire financial straits and you can't pay us anything, I don't want to talk to you, and you don't want to talk to me."
The former bankers who founded PRA in 1996 seized an opportunity created by a credit-hungry society that left an increasing number of spenders deeper in debt than they planned.
The company's growth shows that businesses don't need to make anything or even sell a service to become enormously successful. PRA simply applies innovation to reap rewards from others' financial troubles.
The company's edge is its embrace of computer processing power, says Bob Napoli, an analyst for the William Blair investment bank who has followed PRA for more than a decade. "Yes, it's a debt collection company," he says. "But with the technology they've built, it's really a technology company."
PRA rides economic surges and slumps. In good times, more people can afford to pay their bad debt. And when times are rough, that bad debt is cheaper to buy because there's more of it.
Only about 7 percent of U.S. borrowers fail to pay their debts on time, according to federal statistics. That's the territory PRA mines, knowing that only a tiny fraction of the folks in its database will ever pay the company a cent.
It has mastered the art of finding the needle in a financial haystack. In doing that, it could build itself into Hampton Roads' next Fortune 500 company.
"We have a fleet of really smart math guys sitting just over there," says Neal Stern, PRA's executive vice president of operations, gesturing from his window-walled office into the company's nerve center.
Stern came to PRA from Target, where he worked for 10 years and ran the collection operation for the retailer's credit card business.
Stern, Fredrickson and Kevin Stevenson, the company's other founder and chief financial officer, seem a relaxed bunch, more than willing to speak with candor about their widely detested industry.
To them, debt collecting isn't personal. It's basically a game of numbers.