AGs Reach Settlement To Reform Debt Buying, Collection Practices

Attorney Generals across the country have reached a multimillion-dollar settlement with Encore Capital Group, Inc., and its subsidiaries Midland Credit Management, and Midland Funding. Midland is one of the largest buyers of unpaid debt in the country, and the settlement resolves the states’ investigation into Midland’s debt collection and litigation practices.

As part of the settlement, Midland will provide millions of dollars in debt relief to consumers nationwide, including roughly $1 million to hundreds of Arizona consumers. This debt relief will reduce or completely eliminate the judgment balances for those consumers against whom Midland used an affidavit in court proceedings between 2003 and 2009. Midland will notify eligible consumers by mail, and no further action from those consumers will be necessary.

In addition to the debt relief payments, Midland will also pay $6 million to the states and set aside an additional $25,000 per state to compensate certain consumers who might have paid Midland money that the consumers did not owe.

Further, the settlement requires Midland to reform its affidavit signing and litigation practices. It also protects consumers before litigation is filed, requiring, for example, that Midland review original account documents if a consumer disputes a debt and that the company maintain proper oversight and training for its employees and debt collection attorneys.

In addition, the agreement prohibits Midland from reselling debt for two years.

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