Midland Funding Pays Big Fine Over Robosigning Debt Collection Suits
One of the country’s largest debt buyers has agreed to overhaul its collection practices and pay the state of Minnesota $500,000 in a settlement that reflects heightened scrutiny of the growing industry.
Midland Funding LLC, owned by debt-buying giant Encore Capital Group Inc. in San Diego, faced allegations that it robo-signed paperwork in collection lawsuits without verifying, or in some cases even including, basic facts and signatures.
Minnesota Attorney General Lori Swanson, who announced the agreement Wednesday at a news conference, said the problems discovered with Midland are prevalent in the rapidly growing debt-buying industry. The lawsuit that led to the settlement is believed to be the first government suit against one of the firms.
“This is a real problem area,” Swanson told reporters. “I hope others will take a look at this.”
Midland signed the consent judgment without admitting wrongdoing.
The relatively young debt-buying industry is made up of companies that buy electronic portfolios of old consumer debt from credit card and telecom companies, for instance, for pennies on the dollar and then try to collect on the bills.
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