About PRA Group

PRA Group, Inc. operates as a global financial and business services company with operations in the Americas, Europe, and Australia. The company’s primary business is the purchase, collection and management of portfolios of nonperforming loans. The accounts the company purchases are primarily the unpaid obligations of individuals owed to credit originators, which include banks and other types of consumer, retail and auto finance companies. The company purchases portfolios of nonperforming loans at a discount in two broad categories: Core and Insolvency. The company’s Core operation specializes in purchasing and collecting nonperforming loans, which it purchases since the credit originators have chosen not to pursue, or have been unsuccessful in, collecting the full balance owed. The company’s Insolvency operation consists primarily of purchasing and collecting on nonperforming loans where the customer is involved in a bankruptcy proceeding, or the equivalent thereof, in certain European countries. The company also provides fee-based services on class action claims recoveries in the United States (U.S.). Portfolio Acquisitions To identify purchasing opportunities, the company maintains an extensive marketing effort with its global investment team contacting known and prospective sellers of nonperforming loans. From these sellers, the company acquires a variety of nonperforming loans, including Visa and Mastercard general purpose credit card accounts, private label credit card accounts, personal loans, automobile loans and small business loans. Sellers of nonperforming loans include major banks, credit unions, consumer finance companies, retailers, utilities, automobile finance companies and other credit originators. The company purchases portfolios of nonperforming loans from credit originators through auctions and negotiated sales. In an auction process, the seller will assemble a portfolio of nonperforming loans and will request purchase prices from specifically invited bidders. In a privately negotiated sale process, the credit originator will contact one or more purchasers directly, receive a bid and negotiate the terms of sale. Typically, invited purchasers, in either case, will have already successfully completed a qualification process that can include the seller's review of any or all of the following: the purchaser's experience, reputation, financial standing, operating procedures, business practices and compliance oversight. The company purchases portfolios of nonperforming loans through either single portfolio transactions, referred to as spot sales, or through the pre-arranged purchase of multiple portfolios over time, referred to as forward flow sales. Under a forward flow agreement, it purchases statistically similar nonperforming loan portfolios from a credit originator on a periodic basis, at a negotiated price over a specified term, typically ranging from three to 12 months. Portfolio Collection Operations Call Center Operations In higher volume markets, the company’s collection efforts have been driven by internally staffed call centers. In some newer markets, and in markets that have less consistent debt purchasing patterns, most notably outside the U.S., the company also utilizes external vendors to support some or all of its collection efforts. As part of more recent efforts to enhance the performance of the company’s the U.S. business, it has expanded the outsourcing of collection efforts while also testing and piloting the offshoring of collections. Legal Recovery - Core Portfolios An important component of its collection efforts involves the company’s legal recovery operations and the judicial collection of balances from customers who, in general, have the ability, but not the willingness, to resolve their obligations. There are some markets, especially the Nordic countries, in which the collection process follows a prescribed, time-sensitive and sequential set of legal actions, but in the majority of instances, it uses models and analysis to select those accounts reflecting a higher propensity to pay within a given legal environment. The company uses a combination of internal staff (attorneys and support), as well as external law firms and other third-party vendors, to pursue legal collections under certain circumstances, as it deems appropriate. Insolvency Operations Accounts that are in an insolvent or bankrupt status are managed by the company’s Insolvency operations team. These accounts fall under insolvency plans ranging from Individual Voluntary Arrangements (IVAs) and Trust Deeds in the U.K., to Consumer Proposals in Canada, to various forms of bankruptcy plans in the U.S., Canada, Germany and the U.K. The company files claims or claim transfers securing its creditor rights in plans, and it actively manages these accounts through the entire life cycle of the insolvency proceeding to ensure that it participates in any distributions to creditors. The accounts the company manages are derived from two sources: its purchased portfolios of insolvent nonperforming loans and its Core purchased portfolios of nonperforming loans where its customers file for protection under insolvency or bankruptcy laws after it has purchased the account. Digital As a complement to its collection operations, and in-line with macro trends demonstrating an increasingly digital consumer, the company continues to implement digital platforms to support its collection efforts in all of its operating markets. These platforms provide for inbound collections, as well as outbound collections where permitted by local regulations. The company’s digital channels allow it to service its customers in a channel many of them prefer, providing convenient, user-friendly platforms for making payments, accessing account information, viewing documents and contacting an account representative. Equity Method Investment The company has an 11.7% equity interest in RCB Investimentos S.A. (RCB), a portfolio servicer and manager that performs the underwriting and collections activities related to its Brazilian portfolios. Fee-Based Services In addition to the purchase, collection and management of portfolios of nonperforming loans, the company provides fee-based services including class action claims recovery purchasing and servicing through its subsidiary, Claims Compensation Bureau, LLC (CCB). Seasonality Customer payment patterns in all of the countries in which the company operates can be affected by, among other factors, seasonal employment trends, income tax refunds and holiday spending habits. Government Regulation Significant laws and regulations applicable to the company’s business include the following: Fair Debt Collection Practices Act (‘FDCPA’), which imposes certain obligations and restrictions on the practices of debt collectors, including specific restrictions regarding the time, place and manner of the communications. Fair Credit Reporting Act (‘FCRA’), which obligates credit information providers to verify the accuracy of information provided to credit reporting agencies and investigate consumer disputes concerning the accuracy of such information. Gramm-Leach-Bliley Act (‘GLBA’), which requires that certain financial institutions, including collection companies, develop policies to protect the privacy of consumers' private financial information and provide notices to consumers advising them of their privacy policies. Electronic Funds Transfer Act, which regulates electronic fund transfer transactions, including a consumer’s right to stop payments on a pre-approved fund transfer and right to receive certain documentation of the transaction. Telephone Consumer Protection Act (‘TCPA’), which, along with similar state laws, places certain restrictions on users of certain automated dialing equipment and pre-recorded messages that place telephone calls to consumers. Servicemembers Civil Relief Act (‘SCRA’), which gives the U.S. military service personnel relief from credit obligations they may have incurred prior to entering military service and may also apply in certain circumstances to obligations and liabilities incurred by a servicemember while serving on active duty. Health Insurance Portability and Accountability Act, which provides standards to protect the confidentiality of patients' personal healthcare and financial information in the U.S. The U.S. Bankruptcy Code, which prohibits certain contacts with consumers after the filing of bankruptcy petitions and dictates what types of claims will or will not be allowed in a bankruptcy proceeding, including how such claims may be discharged. Americans with Disabilities Act, which requires that telecommunications companies operating in the U.S. take steps to ensure functionally equivalent services are available for their consumers with disabilities, and requires accommodation of consumers with disabilities, such as the implementation of telecommunications relay services. The U.S. Foreign Corrupt Practices Act (‘FCPA’), the United Kingdom Bribery Act (‘U.K. Bribery Act’) and Similar Laws. The company’s operations outside the U.S. are subject to various U.S. and international laws and regulations, such as the FCPA and the U.K. Bribery Act, which prohibit corrupt payments to governmental officials and certain other individuals. The FCPA prohibits the U.S. companies and their agents and employees from providing anything of value to a foreign official for the purposes of influencing any act or decision of these individuals in order to obtain an unfair advantage or help obtain or retain business. Although similar to the FCPA, the U.K. Bribery Act is broader in scope and covers bribes given to or received by any person with improper intent. Dodd-Frank Wall Street Reform and Consumer Protection Act (the ‘Dodd-Frank Act’), which restructured the regulation and supervision of the financial services industry in the U.S. and created the CFPB. The CFPB has rulemaking, supervisory, and enforcement authority over larger consumer debt collectors. The Dodd-Frank Act, along with the Unfair, Deceptive, or Abusive Acts or Practices (‘UDAAP’) provisions included therein, and the Federal Trade Commission Act, prohibit unfair, deceptive, and/or abusive acts and practices. International data protection and privacy laws, which include relevant country specific legislation in the U.K. and other European countries where the company operates that regulate the processing of information relating to individuals, including the obtaining, holding, use or disclosure of such information; the Personal Information Protection and Electronic Documents Act, which aims to protect personal information that is collected, used or disclosed in certain circumstances for purposes of electronic commerce in Canada; and the GDPR, which regulates the processing and free movement of personal data within the European Union (‘EU’) and transfer of such data outside the EU. Consumer Credit Act 1974 (and its related regulations), Unfair Terms in Consumer Contracts Regulations of 1999 and the Financial Conduct Authority's consumer credit conduct of business rules, which apply to the company’s U.K. operations and govern consumer credit agreements. In addition, certain of the company’s EU subsidiaries are subject to capital adequacy, liquidity and other requirements imposed by regulators, such as the Swedish Financial Supervisory Authority. History The company was founded in 1996. It was incorporated in 2002. The company was formerly known as Portfolio Recovery Associates, Inc. and changed its name to PRA Group, Inc. in 2014.