December 4, 2018
Carson City, NV – Today, Nevada Attorney General Adam Paul Laxalt announced a multi-state settlement with Encore Capital Group Inc. and its subsidiaries Midland Credit Management, Inc. and Midland Funding, LLC, one of the nation’s largest debt buyers. The $6 million settlement among the states and the District of Columbia resolves the multi-state investigation into Midland’s collection and litigation practices. The agreement settles claims that Midland signed and filed affidavits in state courts in large volumes without verifying the information printed in them, a practice commonly called robo-signing.
Debt buying involves buying and selling overdue debts from creditors and other account owners. Often purchased for pennies on the dollar, debt buyers seek to recover the full balance from consumers through collection attempts by phone and mail. Debt buyers including Midland also take consumers to court to collect the debts they purchase. Unfortunately, consumers are often unable to afford attorneys to defend the allegations and cases result in default judgments, harming credit and putting people in jeopardy of having their wages garnished.
“Dealing with aggressive debt collectors can be overwhelming, and consumers are entitled to all of the facts,” said Laxalt. “This settlement will ensure that Midland modifies its collection practices to best serve our consumers.”
Under the terms of the settlement, Midland is required to reform its litigation practices and the ways in which it collects signed, sworn statements for the court, or affidavits. Midland must carefully verify the information in its affidavits and present accurate documents in court proceedings. When Midland files a lawsuit, it must have account documents about the debt before filing their case, including the amount of the debt, proof of an agreement, and an explanation about why any additional fees are justified.
The settlement also offers protections to consumers Midland is collecting from even if they are not being sued. All consumers must receive accurate information about valid debts. If a consumer disputes a debt Midland is collecting, the settlement requires Midland to review original account documents before it continues its collection efforts. Midland must provide these substantiating documents to the consumer for no charge. The settlement requires Midland to maintain proper oversight and training over its employees and the law firms it uses. The agreement prohibits Midland from reselling debt for two years.
As a result of Nevada’s participation in this settlement and its Executive Committee, Midland will completely eliminate or reduce the judgment balances for approximately 118 Nevada consumers for a value of $147,397, in cases where Midland used an affidavit against them in court between 2003 and 2009. Midland will notify impacted consumers by mail of the balance reduction, and no further action is necessary from the consumer.
In addition to Nevada that served as a member of the Executive Committee, participants in this settlement include: Alaska, Alabama, Arizona, Arkansas, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Hawaii, Idaho, Indiana, Iowa, Kentucky, Louisiana, Maine, Michigan, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington, Wisconsin and Wyoming.
Chief Deputy JoAnn Gibbs and Senior Deputy Lucas Tucker represented Nevada in this settlement.
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