PRA Group debt: what to do if PRA Group UK contacts you

Seeing “PRA” on an envelope can be confusing. Some people assume it’s a government regulator. It isn’t. PRA Group is a private company that buys debts, and if it has written to you, an account you fell behind on has probably been sold to it.

Who PRA Group is

Two UK companies are involved, and you may see both names:

• PRA Group UK Portfolios Ltd buys and owns the debts.
• PRA Group (UK) Limited manages the accounts on its behalf and deals with you day to day.

Both belong to PRA Group, Inc., a US company listed on the Nasdaq stock exchange. PRA Group (UK) Limited is authorised and regulated by the FCA (firm reference 718645), and you can check it on the FCA’s Financial Services Register. The company says neither UK business is connected in any way with the Prudential Regulation Authority.

PRA explains that banks and finance companies often sell accounts once they’ve defaulted. When that happens, your original agreement transfers to the buyer. The debt doesn’t disappear. You just owe it to a different company.

The letters PRA Group sends

A notice of assignment. This is usually the first letter. It confirms the account was sold and tells you where to pay.

An “account has changed” letter. Some customers have been told their account moved to PRA Group UK Portfolios Ltd as part of an internal restructure. PRA says these letters are for information only: payment plans carry on and PRA Group (UK) Limited still manages the account.

Annual statements. These show the balance. PRA says they aren’t payment demands.

Letters from its investigation and litigation team. Treat one of these as a warning that court action may be on the way. Reply, and get advice.

If you’re in an IVA or bankruptcy

PRA Group buys some accounts that are already in an insolvency arrangement. If one of your debts is in your IVA or bankruptcy (or a trust deed in Scotland), PRA says you’ll get a letter telling you the account has been sold, because it’s legally required to let you know.

That letter doesn’t change your arrangement. PRA says it deals with your supervisor or trustee directly and the terms of your IVA stay the same. Keep paying into your IVA as normal, and pass the letter to your insolvency practitioner. Read our IVA guide.

PRA Group can’t send bailiffs

PRA Group is a debt collector. It can contact you and ask for payment, but it can’t enter your home or take your things. It would first need a county court judgment, and then a separate enforcement order if you didn’t pay. Credit card and loan debts regulated by the Consumer Credit Act must be enforced in the county court, so they can’t be passed to High Court Enforcement Officers. Read debt collectors vs bailiffs.

Check the debt before paying

• Ask for a copy of the credit agreement under sections 77 to 79 of the Consumer Credit Act 1974. The fee is £1. Until a valid request is met, the agreement can’t be enforced in court.
• Ask for a statement of account so you can see how the balance was reached.
• Check your credit file for the original lender and the default date.

If anything doesn’t add up, say in writing that you dispute it. Use the contact details on your PRA Group letter.

Could the debt be statute-barred?

In England and Wales, the Limitation Act 1980 usually gives a creditor six years, normally counted from the default, to start court action on an unsecured debt. If that time has run without a court claim, and you haven’t paid or acknowledged the debt in writing in those six years, it’s likely to be statute-barred. A sale doesn’t reset the clock. Read statute-barred debt explained before you pay anything on an old account.

If you ignore PRA Group

Letters and calls will continue. PRA Group can choose to issue a county court claim. If you don’t respond to the claim, a CCJ will usually be made, and that can lead to bailiffs, wage deductions or a charging order. If a CCJ was made without you knowing, read how to set aside a CCJ.

Ways to deal with a PRA Group debt

Under the FCA’s rules on arrears and debt recovery (CONC 7), PRA Group must treat you fairly if you’re struggling and take your circumstances into account.

• Offer an affordable payment based on a budget, after priority bills like rent, council tax and energy. Ask for confirmation in writing.
• Ask about Breathing Space, which pauses most creditor action for 60 days while you get advice.
• Use a debt management plan if you have several debts and can repay them in full given time.
• Look at an IVA or a Debt Relief Order if repaying in full isn’t realistic.

If the debt started as a credit card, read can’t pay your credit card? For help choosing, get free debt advice.

Complaining about PRA Group

Complain to PRA Group first, in writing. If you haven’t had a final response after eight weeks, or you disagree with it, you can go to the Financial Ombudsman Service. It’s free.

Frequently asked questions

Is PRA Group the Prudential Regulation Authority?

No. PRA Group is a private debt purchaser. It says it has no connection with the Prudential Regulation Authority, which regulates banks and insurers.

Why was my debt sold to PRA Group?

Banks and lenders often sell accounts after they default rather than keep chasing them. PRA Group buys these accounts and then collects the money owed.

Do I have to pay PRA Group if the debt is in my IVA?

No separate payments are needed. Keep paying into your IVA as agreed. PRA deals with your supervisor, and it says the sale doesn’t change the terms of your IVA.

Sources

• PRA Group UK, Who is PRA Group and why has my debt been sold to them?
• PRA Group UK, I am in an IVA, trust deed or bankruptcy: why am I receiving this letter?
• PRA Group UK, What has changed
• FCA, Financial Services Register
• Financial Ombudsman Service, Debt collecting