Settlement includes reformed debt buying, collecting practices
OKLAHOMA CITY – Attorney General Mike Hunter today announced 266 Oklahomans, who were victims of Midland Funding, LLC.’s debt-buying scheme, will receive $327,437 in credit as part of a nationwide settlement.
Today’s announcement is the result of a 2012 multistate investigation into Encore Capital Group, Inc., one of the nation’s largest debt collection companies, and its subsidiaries, Midland Credit Management, Inc. and Midland Funding, LLC., one of the nation’s largest debt buyers.
Debt buying involves buying and selling overdue debts from creditors and other account owners. Debt buyers often purchase an individual’s debt for pennies on the dollar and seek to recover the full balance from consumers.
The investigating states found that between 2003 and 2009 Midland signed and filed affidavits to collect consumer debt without verifying the information contained in the affidavits. This practice is known as ‘robo-signing’, a term used to describe employees signing legal documents without reviewing the contents.
Attorney General Hunter said the settlement also includes provisions the company must follow to ensure customers are protected.
“The practice that was undertaken by Midland is inexcusable,” Attorney General Hunter said. “Affected individuals often could not afford attorneys to defend themselves, resulting in a default judgment, which hurt their credit and resulted in their wages being garnished. That is another reason why as part of the settlement we required the company to include safeguards in its collecting practices so customers won’t be taken advantage of again.”
As part of the new protections, the company must reform its affidavit signing and litigation practices; it must carefully verify the information in affidavits and present accurate documents in court proceedings, provide all customers with accurate information about valid debts and maintain proper oversight and training for employees and law firms it uses. The agreement also prohibits the company from reselling debt for two years.
Each individual will receive a different amount of credit toward his or her account. The company will notify impacted customers by mail of the amount by which their balance will be reduced.
Joining Oklahoma in today’s settlement were attorneys general from: Alaska, Alabama, Arizona, Arkansas, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Michigan, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington, Wisconsin and Wyoming.