PRA Group
| Company type | Public |
|---|---|
| Industry | Debt buying, debt recovery |
| Founded | March 1996 |
| Founder | Kevin Stevenson, Steve Fredrickson |
| Headquarters | Norfolk, Virginia , United States |
Area served | 18 countries |
| Products | Debt purchasing and collection services |
Number of employees | 3200+ |
PRA Group, Inc. is a publicly listed company specializing in debt buyer activities and debt recovery, with its headquarters located in Norfolk, Virginia. Established in 1996, the firm acquires overdue consumer debts from credit card companies and financial institutions at discounted rates and subsequently seeks to collect the full outstanding balances. The organization employs more than 3,200 individuals operating across 18 different countries.
Portfolio Recovery Associates has encountered regulatory scrutiny and penalties from both the Consumer Financial Protection Bureau and the New York Attorney General due to unlawful debt collection methods, including deceptive consumer practices and violations related to consumer reporting.
History
Founded in March 1996 under the name Portfolio Recovery Associates, LLC by Kevin Stevenson and Steve Fredrickson—both former collections experts at Household Finance—the company started with a team of four in Norfolk, Virginia. It began purchasing debt portfolios in May of that year. By 2000, PRA had accumulated $1 billion in purchased debt, ranking as the tenth-largest debt buyer nationwide.
In 2000, PRA launched a call center in Hutchinson, Kansas, which employed 75 collectors by the following year. Its main call center in Virginia Beach employed approximately 380 staff members. By 2002, nearly half of its $4.7 billion portfolio was sourced from leading credit card issuers such as Visa, MasterCard, and Discover. Across all locations, the company had grown to 590 employees.
PRA became a publicly traded entity on November 8, 2002, raising $50.7 million through an initial public offering priced at $13 per share. Early in 2003, its stock price had increased by 60% above the IPO price. A secondary offering in May 2003 enabled insiders—including the founders—to realize $12.2 million.
In April 2010, PRA secured a controlling stake in Claims Compensation Bureau, a firm focused on recovering funds from class-action settlements.
By 2013, PRA ranked among the top five debt buyers in the United States according to the Federal Trade Commission. The company reported revenues of $813 million in 2017. In October 2014, it rebranded from Portfolio Recovery Associates, Inc. to PRA Group, Inc.
The company expanded internationally in 2015 by acquiring Aktiv Kapital, a Norway-based debt buyer with operations across Europe and Canada. In 2020, PRA further extended its global footprint by entering the Australian market.
Litigation and regulatory actions
In 2014, the New York Attorney General reached a settlement with PRA following allegations that the company engaged in improper debt collection tactics against consumers within New York State. This involved uncontested default judgments against defendants who failed to respond to PRA’s lawsuits. The settlement required PRA to dismiss claims against these debtors, modify its collection procedures, and pay a civil penalty.
A jury awarded $82.99 million in punitive damages against Portfolio Recovery Associates in May 2015 for malicious prosecution related to Maria Guadalupe Mejia’s case; she was pursued over a credit card debt of $1,000 she did not owe. Additionally, PRA was fined $250,000 for breaching the Fair Debt and Collection Practices Act.
In September 2015, the Consumer Financial Protection Bureau imposed an $8 million fine on PRA and mandated $19 million in refunds to consumers while ordering cessation of collection efforts on debts exceeding $3 million. The CFPB found that PRA had:
- Used threats and deceptive tactics to collect inaccurate debts;
- Provided erroneous information regarding balances, interest rates, and payment deadlines;
- Failed to furnish adequate documentation supporting debts;
- Filed lawsuits without proper evidence to mislead consumers and obtained default judgments when defendants did not appear;
- Attempted to collect debts known to be barred by statute of limitations.
A UK court ruling in 2019 involving PRA Group’s UK subsidiary clarified that creditors cannot pursue debts if no action is initiated within six years following default.
In March 2023, regulators fined PRA $24 million due to persistent illegal debt collection practices and violations related to consumer reporting. Despite prior enforcement actions in 2015, PRA continued employing intimidation, deceptive methods, and unlawful strategies.
In 2024, PRA agreed to pay $5.5 million to resolve a class action lawsuit accusing it of violating North Carolina’s debt collection statutes by securing default judgments without sufficient evidence validating the claimed debts.
Subsidiaries
Among the companies under PRA Group are Portfolio Recovery Associates, LLC, which focuses on acquiring and collecting outstanding debts; PRA Receivables Management, LLC, dedicated to purchasing and managing accounts related to bankruptcy and insolvency; PRA Location Services, which supports auto lenders and insurers in tracking down lost collateral; and Claims Compensation Bureau (CCB), responsible for overseeing and submitting class action claims on behalf of institutional investors and corporate clients.