Pioneer Credit Recovery
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Author: Jenna Vasquez
Pioneer Credit Recovery is a debt collection company founded in 1980, that specializes in recovery of debts owed to local, state, and federal government entities as well as federal student loans and SBA loans.
The company is a subsidiary of Navient (formerly a part of Sallie Mae), which holds federal and private student loans. One of the federal agencies the company collects for is the IRS — one of the four private companies hired to do collections for overdue taxes.
Top Ranked Companies
The Good
- Direct Payments
- Debt Collector, Not Buyer
- Loan Rehabilitation Program
Direct Payments
Pioneer Credit Recovery is now able to accept payments from customers on behalf of government entities — for example, the IRS. This was not previously available, but makes payments much easier now.
Debt Collector, Not Buyer
The company does not purchase debts, but collects them on behalf of the original creditor. As such, the company will not sue customers to solicit funds. However, the company does have the ability to garnish wages, which may not be desirable by some customers.
Loan Rehabilitation Program
Pioneer Credit Recovery offers a loan rehabilitation program, with monthly payments to restore loans which have fallen into a defaulted status. This is an excellent option for customers who have the resources and desire to repair issues related to defaulted loans.
The Bad
- Wage Garnishments
- Lack of Negotiation Power
- Aggressive and Misleading Tactics
Wage Garnishments
When collecting federal student loans, the company is able to use the “Administrative Wage Garnishment Order” to garnish wages without a judgment. This also can apply to SBA Loans and overdue taxes. Customers may be surprised by this lack of court process, and may be unprepared to handle a wage garnishment that is not anticipated.
Lack of Negotiation Power
As a third-party debt collector, Pioneer Credit Recovery has to communicate with the original creditor to approve any negotiations. Also note that typically, student loans don’t settle for less than 85 percent of the original amount owed, so there isn’t much wiggle room for those types of loans specifically.
All of this is to say that customers may not have much ability to negotiate “settled for less than owed” discounts.
Aggressive and Misleading Tactics
Pioneer Credit Recovery has been sued by the Consumer Financial Protection Bureau (CFPB) for “systemically and illegally failing borrowers at every stage”. The company has also been called to task by four U.S. Senators for making implied threats and other violations of the FDCPA.
Other companies, like Portfolio Recovery Associates, prioritize the customer experience and offer online contacting methods, payment agreements, and fair negotiations.
The Bottom Line
If Pioneer Credit Recovery is handling a customer’s personal debts, be advised that the company’s primary agenda will be to recover funds, with very little negotiation opportunity, while utilizing aggressive tactics, including lawful but unexpected wage garnishments.
It is best to be proactive and get everything in writing, work through payment plans and pay as agreed, lest the company implement surprise tactics that may not have a customer’s best interest in mind.
