UK debt buyers have historically paid pennies for each £1 of face value. Arrow Global disclosed an average of 11.7p per £1 in 2016. Lowell disclosed an average of 5.4p per pound in the years up to 2013.
Behind those numbers sits a legal sale under section 136 of the Law of Property Act 1925. The lender transfers ownership of the debt to a buyer, in writing, and you receive a Notice of Assignment telling you the account has moved and to whom you should now pay.
This guide explains how a sale works, what those historical prices actually looked like, why lenders sell defaulted accounts, and what changes for you when an account is sold on. It draws on legal sources, FCA rules and annual reports from listed UK debt buyers.
This is general information about how UK debt purchase works. It is not personal financial advice or regulated debt advice.
Quick answer
UK lenders sell batches of defaulted accounts to specialist debt buyers under section 136 of the Law of Property Act 1925. Historical filings from listed UK buyers show they paid roughly 5p to 12p for each £1 of the balance. You still owe the full balance, though, and the buyer chases that in its own name. Once you receive a Notice of Assignment you pay the buyer, not the original lender. FCA rules on how you can be chased still apply.
You still owe the full balance the account had on the day it was sold. The price the buyer paid the original lender is between them, not you. What that price does explain is why offers to settle for less can appear later.
Useful next steps before you engage
Before you engage with a letter from a debt buyer, put the wider picture in front of yourself:
- If you have received a settlement offer from the buyer, read Why Do Debt Collectors Settle for Less in the UK?
- If you are unsure whether a lump sum offer is even legitimate, read Partial Settlements UK: What to Check Before You Say Yes.
- If your main concern is what any deal does to your credit file, read Partial Settlement UK: Credit Score Impact.
- If the account is old, read What Is Statute Barred Debt and How Do I Know If Mine Qualifies? before doing anything.
The aim is to understand what has been sold, to whom, and what that means for you, before responding to any letter.
How much do UK debt collectors actually pay for a debt?
Until recently, the largest UK debt buyers were listed on the London Stock Exchange. That meant they had to publish, in their annual and interim results, how much they paid for the debt they bought. Those disclosures are the clearest public evidence of what a defaulted account is worth to a buyer.
Arrow Global: 11.7p per £1 in 2016
In its 2016 preliminary results, Arrow Global reported paying £258.4 million for £2.2 billion of face value bought in the year. That is an average of about 11.7p for each £1 of the balance owed on those accounts.
Its 2015 annual report showed £180.3 million paid for £1,505.8 million of face value, an average of about 12p per £1. Arrow Global was taken private in 2021, so more recent numbers are no longer public.
Lowell: 5.4p per £1 to end 2013
Lowell's Q1 2014 report showed a running total of £628 million paid for £11.6 billion of face value bought by the end of 2013. That is an average of about 5.4p for each £1 across everything they had bought up to that point. Lowell is now private and no longer publishes this number.
Cabot, Intrum, PRA, Hoist, Link
The other big UK buyers do not publish a UK per pound purchase price today. Cabot is majority owned by Encore Capital Group in the US and reports as part of Encore's SEC 10-K filing. Intrum UK is part of Intrum AB, listed in Sweden. PRA Group UK is part of PRA Group Inc, listed in the US. Hoist Finance is listed in Stockholm. Link Financial is privately owned. All of these report at group level, so a UK only per pound figure is not visible from the outside.
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Explore the Members’ HubHow a debt is legally sold in the UK
When a lender sells a debt, they are not handing over a physical thing. They are selling the right to collect the money. In law that is called an assignment, and the rules for it sit in section 136 of the Law of Property Act 1925.
What section 136 requires
Three things have to be true for the sale to bite legally:
- the sale is a full transfer of the debt, not just security for something else;
- it is in writing, signed by the original lender; and
- you get written notice of it.
That written notice is the Notice of Assignment. Without a valid notice, the buyer can still collect in some ways, but suing you in the buyer's own name relies on section 136 being met.
What a Notice of Assignment looks like
The Notice of Assignment is the letter that tells you the account has been sold. It should say who the original lender was, when the sale happened, who the buyer is, and how to pay the buyer from now on. It should also give the account reference and the balance on the day of sale.
If a firm you have never dealt with starts asking for payment and you have not received a Notice of Assignment, ask them in writing for a copy and for evidence that the sale actually happened. That is a reasonable request and one you are entitled to make.
Buyers paid about 5p to 12p for each £1 in the disclosures we can see. They still chase you for the full £1.
The Real Debt GuyWhy lenders sell defaulted accounts
The short answer is that the sale is worth more to the lender, in the near term, than the long slow job of chasing an account they have already written down as unlikely to pay in full.
It turns a slow drip into up front cash
A defaulted account has already been reduced in value on the lender's books. Selling it turns a slow, uncertain stream of small payments into one cash amount today. It also frees up the lender's collections team to work on newer accounts.
The FCA expects them to check first
Before an account is sold, the lender should have taken reasonable steps to check whether the customer is in financial difficulty. The rule sits at CONC 7.3.5DR in the FCA Handbook: a firm "should not pass a debt to a third party until it has taken reasonable steps to establish whether the customer is in financial difficulty and to treat them with forbearance and due consideration."
In plain English: a lender should not just dump your account on a buyer without first checking whether you are struggling and giving you a fair chance.
Buyers make money on the gap
Debt buyers make money by paying less for the debt than they expect to collect over time. That is why a buyer can accept a reduced total later on and still come out ahead of what they paid. It is also why buyers are willing to spend years working an account.
Who the main UK buyers are
The UK debt purchase market is concentrated in a handful of firms. All are FCA authorised to carry on debt collection activity when they operate in the UK.
- Arrow Global. Founded 2005, listed on the London Stock Exchange 2013 to 2021, then taken private by TDR Capital. Buys consumer and small business debt across Europe.
- Lowell (Lowell Financial). Part of Garfunkelux Holdco, owned by Permira. Large UK consumer debt purchaser and operator of GFKL in Germany.
- Cabot Credit Management. Majority owned by Encore Capital Group Inc, a US listed company (Encore Capital 10-K). Operates across the UK and Ireland.
- Intrum UK. UK arm of Intrum AB, Sweden's largest credit management services group.
- PRA Group UK. UK arm of PRA Group Inc, a US listed debt purchaser headquartered in Norfolk, Virginia.
- Hoist Finance. Swedish listed group operating in the UK as Hoist Finance UK.
- Link Financial. Privately owned UK debt purchase and servicing group.
Trade association context is useful. The Credit Services Association 2024 annual report states its members hold consumer credit debts of "in excess of £35 billion" across around 39 million accounts. That is the scale of the market these buyers operate in.
What changes for you when the account is sold
Who you pay
Once the sale takes effect, you owe the buyer, not the original lender. Payments should go to the buyer using the details on the Notice of Assignment. If you keep paying the old lender after that, you may still be treated as not having paid the buyer.
What you owe
The balance does not change because the debt has been sold. The buyer takes the account at the balance on the day of sale. Whether interest keeps being added after that depends on the original agreement, the type of debt, and the buyer's own policy under FCA rules.
Your credit file
The original default marker stays on your credit file for six years from the date of default. When the debt is sold, the entry usually updates to show it has moved to a new owner. The default date does not restart. That matters, because it means the six year clock does not begin again every time an account changes hands.
Your legal position
Any defence you had against the original lender travels with the debt. If the account was mis-sold, if the balance was wrong, if the default notice was defective under section 87 of the Consumer Credit Act 1974, or if the debt is close to being statute barred, those points remain available to raise with the buyer.
FCA rules that still apply after sale
A debt buyer that collects consumer credit debts in the UK has to be authorised by the Financial Conduct Authority. The FCA's rulebook for consumer credit is called CONC, and the section that most often matters after a sale is CONC 7.3. In plain English, here is what those rules require of a buyer.
- Treat you fairly and with patience if you are in arrears or in difficulty.
- Do not chase you before taking reasonable steps to check whether you are in financial difficulty.
- Tell you clearly what happens if you do not pay.
- Put your payments where you have asked them to go.
- Look at your income and essential spending before deciding what you can afford.
- Do not pressure you to sell your home, borrow more, or dip into a pension to pay them.
These duties apply to a buyer in exactly the same way they applied to the original lender. If a buyer ignores them, the complaint goes to the buyer first, and then to the Financial Ombudsman Service if it is not resolved.
Limitation and older accounts
Buyers often end up with older accounts. That makes the rules on how old a debt can be before a court claim is out of time really matter.
England and Wales: six years
Under section 5 of the Limitation Act 1980, a court claim on most consumer credit debts cannot be brought more than six years after the debt first became due. For most defaulted accounts, that is six years from the date of default, unless something has restarted the clock.
Scotland: five years
In Scotland the equivalent period is five years under the Prescription and Limitation (Scotland) Act 1973. In Scotland, when the period runs out most consumer debts go away entirely. In England and Wales the debt still technically exists, but a court claim can be defended on the basis that it is out of time.
What restarts the clock
In England and Wales, making a payment on the account or acknowledging the debt in writing restarts the six year clock from that date. Scotland has similar rules until the debt is extinguished. If a buyer has an old account and is pushing for a payment or a written response, check the age of the debt before you send anything.
Before you pay a buyer anything
Whether the buyer is asking for the full balance, a reduced lump sum, or a monthly amount, work through this list first.
- Check the debt is yours and the balance looks right.
- If you have not been sent a Notice of Assignment, ask for one. Check the date, the original lender's name, and the reference on it.
- Check whether the account may be statute barred, and if it might be, read the statute barred guide before you send any money or reply in writing.
- Check whether the original agreement or default notice had any issues under the Consumer Credit Act 1974.
- Check your budget so any payment does not eat into rent, mortgage, council tax, utilities or food.
- Ask for anything important in writing: any reduced figure, the deadline, what happens to the remaining balance, and how the credit file will be updated.
- Keep the letter and proof of payment.
- If more than one buyer is chasing you, do not empty a lump sum on one account without thinking about the rest.
Can you really afford what the buyer is asking for?
Check your budget before agreeing to any figure
Before agreeing to a lump sum, a settlement, or a new monthly amount with a debt buyer, use the TRDG Budget Planner to check your income, priority bills, essential spending and what is genuinely left.
Open the Budget Planner
FAQs
How much do UK debt collectors actually pay for a debt?
Public disclosures from listed UK buyers give a benchmark. Arrow Global reported an average of 11.7p per £1 across £2.2 billion of face value bought in 2016 (Arrow Global FY2016 preliminary results), and 12p per £1 the year before. Lowell's Q1 2014 report showed an average of 5.4p per £1 across £11.6 billion of face value bought by the end of 2013 (Lowell Group Q1 2014 interim report). Both firms are now private and no longer publish this number. Prices move year to year, but they are pennies in the pound, not pounds in the pound.
If the buyer only paid pennies, do I still owe the full balance?
Yes. A legal sale under section 136 of the Law of Property Act 1925 transfers the right to collect the full balance. The price the buyer paid the original lender is a matter between them, not you.
How is a debt legally sold in the UK?
By legal assignment under section 136 of the Law of Property Act 1925. The assignment must be in writing signed by the original creditor, must be absolute rather than by way of charge, and express written notice of the assignment must be given to you as the debtor. That written notice is the Notice of Assignment.
What is a Notice of Assignment?
The written notice sent to you telling you the account has been sold and to whom you should now pay. It is required under section 136 of the Law of Property Act 1925 for the assignment to have full legal effect against you.
Who are the main UK debt purchasers?
The largest UK debt purchasers include Arrow Global, Lowell (Lowell Financial), Cabot Credit Management, Intrum UK, PRA Group UK, Hoist Finance and Link Financial. Cabot and PRA also operate elsewhere in Europe and North America. All are regulated by the Financial Conduct Authority when carrying out consumer credit activity in the UK.
Does the balance change when a debt is sold?
The balance owed does not change simply because the debt has been sold. The buyer takes on the account at the balance owed at assignment. Whether interest continues to accrue depends on the original agreement, the type of debt, and the buyer's own policy under FCA CONC rules on treating customers in financial difficulty fairly.
Do FCA rules still apply after a debt is sold?
Yes. The buyer must be FCA authorised to carry on debt collection activity, and the FCA's Consumer Credit sourcebook (CONC), especially CONC 7 on arrears, default and recovery, applies to the buyer in the same way it applied to the original creditor.
Can a very old debt still be sold and chased?
An old debt can still be sold, but in England and Wales a court claim for most consumer credit debts cannot be brought more than six years after the debt first became due, under section 5 of the Limitation Act 1980. In Scotland the equivalent period is five years under the Prescription and Limitation (Scotland) Act 1973. A payment or written response can restart the clock in England and Wales, so check the dates before you reply. See the statute barred guide.
