At 07.40 hours on 7 July 1942, U-255 fired a spread of two torpedoes at two freighters from convoy PQ-17 which had been dispersed on Admiralty orders in the Barents Sea on 4 July. The torpedoes missed due to the great distance of about 6000 meters, but another torpedo fired at 09.27 hours hit the Alcoa Ranger (Master Vernon Lancelot Jubb). The torpedo struck on the starboard side at the #2 hold, opening a large hole and causing the vessel to list heavily to starboard. The eight officers, 26 men and six British gunner (the ship was armed with two old AA guns and one .30cal Lewis MG) abandoned ship in three lifeboats 15 minutes after the attack.

The U-boat surfaced after the attack and headed towards the second freighter which had stopped, but he escaped so they returned to Alcoa Ranger and questioned the survivors. The Germans then began to shell the ship from a distance of about 100 meters and fired at least 60 shells (some survivors stated that they used as many as 150 shells) until she sank by the bow at 12.00 hours. Two of the lifeboats landed at Novaya Zemlya on the same day and one week later the last boat landed at Cape Kanin. They were all brought to Archangel by Soviet patrol boats. The crew was later repatriated from Scotland on the British troop transport Queen Mary and arrived Boston on 15 October.