Strange Garbage Character in SQL server database like ÂÃÂÃÂÃÂÃÂÃÂÃÂÃ
According to the MSDN page for PDO::setAttribute, PDO::SQLSRV_ENCODING_UTF8 is the default value, so setting it explicitly probably wouldn't change the behavior.

Try the other option, PDO::SQLSRV_ENCODING_SYSTEM, which seems to have worked in this case from the MSDN forums: Some characters improperly retrieved through PDO driver.