Debt firm wants £133 for an AA loan I never had

I RECEIVED a letter in November claiming I had a debt of £1,966.87 with Automobile Association Personal Finance. The letter came from PRA Group of Kilmarnock, Scotland.

It said the original agreement had been taken out on December 12, 1986, with a balance of £1,328.87 and offered a final settlement payment of £132.89.

I have never had any personal finance dealings with the AA, although I was a member 40 years ago. I am astounded to have been contacted about a debt that was supposedly taken out so long ago. During this time I have never had any communication with the AA or anyone else about it. Is this a scam? THIS may not be a scam, but it does have a troubling feel about it.

Pra buys old debts and tries to get some payment — often by asking for around 10 pc of the amount that is outstanding.

As the original creditor has given up and may well have sold the debt for pennies, Pra needs only a small success rate to make a profit.

AA was shocked by the letter, too. It says it has never had a business arrangement with Pra and expressed concern that its name was being used in pursuit of this debt.

It suggested the account number may relate to an old credit card from when it had a relationship with Halifax Bank of Scotland. With this letter, Pra Group is trying to make you acknowledge the debt or accept responsibility for it.

Why? Well, the Limitations Act 1980 places a six-year time bar on pursuing unsecured debts. It applies as long as:

Within six years of the debt being established the creditor has not already obtained a county court judgment against you;

you or anyone else owing the money (if your debt is in joint names) have not made a payment towards the debt during the last six years;

you have not written to the creditor admitting you owe the debt in the last six years.

Pra says it bought the debt in 2007 and spoke to a someone with a very similar name in December of that year and that person would not provide verification details. But, then, neither would I if someone phoned me out of the blue asking for personal details.

It says it then used tracing services and issued an annual statement for the account.

When you received the letter you requested proof of the debt, but it would not discuss this without you providing further personal information. And, again, why should you?

Pra says the debt became statute-barred in november 2012 because it was operated as a credit card until a last payment was made in 2006, but argues this does not extinguish the debt. This, it says, would only happen if you confirmed you had no intention of making payments. I would have thought this was obvious since you’d told them you had no knowledge of the debt.

I’m extremely concerned about this episode. My advice to anyone receiving a similar letter chasing a statute-barred debt is to contact the financial Conduct Authority on 0800 111 6768.

If you tell a firm that an old debt is not yours and the firm continues to chase you, contact the financial ombudsman Service on 0800 023 4567.

These letters are not worth the paper they are written on. If a debt is statute-barred, you don’t have to pay a penny.

As for your case? Well, I think it is likely Pra got the wrong person. It points out that it did not threaten any enforcement action and has agreed not to contact you again. IN OCTOBER, I received a statement from Virgin Media advising me I was due a refund of £ 55.70 after changing supplier to Sky.

I got the cheque in November but my bank would not accept it because it was not made out in my full name. I rang Sky and asked for the cheque to be reissued.

I was kept hanging so eventually wrote to return the cheque but heard nothing. I rang again on December 29 but still, nothing. Firstly, I think it’s rather silly of your bank to have refused to cash the cheque.

Virgin had issued a cheque using your middle name and surname. I know several people who choose to use their middle name without difficulty. It should have been a simple matter for your bank to verify that you were the person who was named on the cheque.

As you didn’t supply a phone number I wasn’t able to ring to check the other mysterious detail — that you rang Sky to ask for the cheque to be reissued. Is it possible that you also wrote to Sky rather than to Virgin by mistake?

Either way, Virgin Media has now reissued your cheque so all should be well.