JEFFERSON CITY – Missouri and other states have reached a $6 million settlement agreement with Encore Capital Group Inc., Missouri Attorney General Josh Hawley announced Dec. 5.
Missouri is now one of 41 states and the District of Columbia to come to a settlement with Encore, which has been dubbed one of the biggest debt purchasers in the country, and its subsidiaries Midland Credit Management, Inc. and Midland Funding LLC. The settlement resolves investigation into Midland's litigation and collection 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," a press release from Hawley's office states.
“Protecting vulnerable consumers from unscrupulous debt collectors is paramount in my office," said Hawley in the release. “We will not hesitate to illuminate and stop predatory debt collection practices that seek to take advantage of Missourians.”
Midland is just one of the many companies that have gone head-to-head with consumers in court in order to get the debt the company purchased. The press release states the cases can result in default judgments when consumers are unable to afford attorneys, which hurts credit scores.
According to the terms of the settlement, Midland is ordered to update its affidavit signing procedures and has to now confirm the information in court documents is correct. The settlement also aims to protect consumers from Midland as Midland has to provide them with correct information, even if it isn’t filing a lawsuit.
"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 press release states.
Midland will also have to get rid of or lower the judgment balances for 363 consumers, valued at $557,530 where Midland used an affidavit in court. The time period is between 2003 and 2009.