PRA Group facts for kids

PRA Group, Inc. is a company that buys old debts from banks and credit card companies. Imagine someone owes money on a credit card, but they haven't paid it back in a long time. The credit card company might sell that old debt to PRA Group for a lower price. Then, PRA Group tries to collect the full amount of money that was originally owed.

This company started in 1996 and is based in Norfolk, Virginia, in the United States. PRA Group has over 3,200 employees and works in 18 different countries.

Sometimes, PRA Group has faced issues with how it collects debts. In 2015 and 2023, a government agency called the Consumer Financial Protection Bureau (CFPB) found that PRA Group used unfair methods when trying to collect money. The company also had to pay fines and change some of its practices.

History of PRA Group

PRA Group began in March 1996. It was first called Portfolio Recovery Associates, LLC. Two people, Kevin Stevenson and Steve Fredrickson, started the company. They used to work in debt collection at another company.

They started with just four employees in Norfolk, Virginia. By May 1996, the company began buying debts. In 2000, PRA bought debts worth $1 billion. At that time, it was one of the ten largest debt buyers in the United States.

Growing the Company

In 2000, PRA Group opened a call center in Hutchinson, Kansas. By 2001, 75 people worked there to collect debts. The main call center was in Virginia Beach, Virginia, and had 380 employees.

By 2002, about half of the debts PRA Group owned came from big credit card companies like Visa, MasterCard, and Discover. These debts were worth $4.7 billion, owed by about 1.5 million people. In 2002, PRA Group had 590 employees in total.

Becoming a Public Company

PRA Group became a public company on November 8, 2002. This means its shares could be bought and sold by anyone on the stock market. They sold 3.9 million shares at $13 each, raising $50.7 million. By February 2003, the share price had gone up a lot.

In 2013, a government report listed PRA Group as one of the top five debt buyers in the U.S. In October 2014, the company changed its name from Portfolio Recovery Associates, Inc. to PRA Group, Inc.

Expanding Globally

In 2015, PRA Group bought Aktiv Kapital. This was a company that bought debts in Europe and Canada. In 2020, PRA Group also started working in Australia.

Rules and Lawsuits

PRA Group has faced some legal actions and fines because of its debt collection practices.

Actions by New York State

In 2014, the Attorney General of New York state reached an agreement with PRA Group. This was because the company had repeatedly started unfair lawsuits against people in New York. The agreement meant PRA Group had to stop trying to collect some debts. They also had to change how they collected money and pay a fine.

Consumer Protection Bureau Actions

In September 2015, the Consumer Financial Protection Bureau (CFPB) took action against PRA Group. The CFPB is a government agency that protects consumers. They ordered PRA Group to pay an $8 million fine. The company also had to give back $19 million to consumers. They were told to stop trying to collect over $3 million in debts.

The CFPB found that PRA Group:

• Used unfair or misleading ways to collect debts that might not have been correct.
• Gave wrong information about how much was owed, interest rates, or payment dates.
• Did not provide proper documents for debts.
• Started lawsuits without enough paperwork, hoping people wouldn't show up in court.
• Filed lawsuits for old debts that were past the legal time limit for collection.

In March 2023, PRA Group was fined another $24 million. This was for continuing to use unfair debt collection methods and for issues with how they reported consumer information. The head of the CFPB said that even after the 2015 action, PRA Group kept breaking the rules.

UK Law on Old Debts

In 2019, a court case in the UK involving PRA Group helped clarify a law about old debts. The judge decided that if no action had been taken on a debt for six years, creditors could not try to collect it anymore. This is called a "statute-barred debt."

PRA Group's Other Companies

PRA Group owns several other companies that do different things:

• Portfolio Recovery Associates, LLC: This company buys and collects debts.
• PRA Receivables Management, LLC: This group buys and manages debts from companies that are bankrupt or unable to pay.
• PRA Location Services: This helps car lenders and insurance companies find missing vehicles that were used as loan collateral.
• Claims Compensation Bureau (CCB): This company helps large investors and businesses get money they are owed from class-action lawsuits.

Owning Other Businesses

In April 2010, PRA Group gained a major ownership stake in Claims Compensation Bureau (CCB). CCB specializes in helping people and companies get money back from large group lawsuits, called "class-action settlements."