A multi-state action against Encore Capital Group has ended in a settlement with many states to reduce or eliminate debt owed by residents. If you live in one of the states mentioned in the information below, you should contact your Attorney General office to determine your inclusion in this settlement.
The North Carolina announcement of the settlement is below.
Attorney General Josh Stein today announced that North Carolina has reached a $6 million 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. This settlement was reached with 41 other states and the District of Columbia. North Carolina’s share of the $6 million settlement is $175,992. In addition to those funds, approximately 2,176 North Carolinians will see their debt reduced or eliminated by $3,327,099.
“Debt collectors use all sorts of tricks to take advantage of vulnerable people,” said Attorney General Josh Stein. “I am pleased that this settlement will not only eliminate and reduce debt balances for more than 2,000 North Carolinians, it will also permanently prohibit Midland from engaging in these damaging practices moving forward.”
As part of the settlement, Midland will completely eliminate or reduce the judgment balances for approximately 2,176 consumers in North Carolina for a value of $3,327,099 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, Midland will set aside $25,000 per state to compensate consumers who may have paid Midland money that the consumers did not owe.
The settlement requires Midland to reform its business practices in a number of ways. Midland must carefully verify the information in affidavits and present accurate documents in court proceedings. All consumers, even those not being sued, must receive accurate information about valid debts. If a consumer disputes a debt Midland is attempting to collect, the settlement requires Midland to review original account documents before it continues its collection efforts and provide these documents to the consumer at no charge. The settlement requires Midland to maintain proper oversight and training over its employees and the law firms that it uses, and it prohibits Midland from reselling debt for two years.
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 people through collection attempts by phone and mail. Debt buyers, including Midland, also take consumers to court to collect the debts they purchase. However, people are often unable to afford attorneys to defend the allegations, so cases result in default judgments, hurting credit and putting people in jeopardy of having their wages garnished.
The settlement resolves the States’ investigation into Midland’s collection and litigation practices. Much like the conduct witnessed during the mortgage crisis, 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.
Joining Attorney General Stein in today’s settlement were the Attorneys General of 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 Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington, Wisconsin, and Wyoming.