(Boise) – Attorney General Lawrence Wasden has announced that Idaho is entering a $6 million settlement with one of the nation’s largest debt buyers. The settlement with Encore Capital Group Inc. and its subsidiaries Midland Credit Management, Inc., and Midland Funding, LLC involves 41 other states and the District of Columbia. The settlement follows a six-year investigation.
Debt buyers like Midland buy past-due debts from creditors for pennies on the dollar and attempt to recover the debts through aggressive collection techniques. The settlement resolves the states’ investigation into Midland’s collection and litigation practices that involved Midland robo-signing large volumes of affidavits without verifying the information and filing lawsuits without proof of the underlying debts.
The settlement requires Midland to change the way it signs affidavits and litigates in court. The company must now carefully verify the information in affidavits and present accurate documents during court proceedings. Midland must also provide consumers with accurate information about valid debts. If a consumer disputes a debt that Midland is collecting, the company must provide the documents supporting the debt to the consumer at no charge.
“Consumers often find themselves at the mercy of aggressive debt collectors, unable to afford attorneys, and doing battle on their own,” Wasden said. “They can wind up with judgments for more than the original debts, damaged credit, and the possibility of wage garnishments. This settlement helps level the playing field.”
The settlement requires Midland to completely eliminate or reduce the judgment balances of accounts in cases where Midland used an affidavit in court between 2003 and 2009. This requirement impacts 26 Idaho accounts for a total consumer benefit of $39,295. Additionally, Midland is setting aside $25,000 to compensate Idaho consumers who may have paid the company money they didn’t actually owe. Consumers eligible for benefits under the settlement will receive a mailed notice from Midland.
As part of the settlement, Midland will pay the State of Idaho $79,000 to help cover costs incurred during the investigation.