State Attorney General Chris Carr announced on Tuesday that Georgia had joined 41 states and the District of Columbia in reaching a settlement with Encore Capital Group Inc., one of the world’s largest debt buyers. of the country, and its subsidiaries Midland Credit Management, Inc. and Midland Funding, LLC. .
“The robotic signing by Encore Capital Group Inc. and its subsidiaries was unfair and hurt consumers,” Attorney General Carr said. “I am proud of the work of our Consumer Protection Division throughout this process to protect the citizens of Georgia and I hope this action sends a strong message to debt collectors that this behavior will not be tolerated.”
Buying debt involves buying and selling past due debt from creditors and other account holders. Often bought for pennies on the dollar, debt buyers seek to recoup the full balance from consumers through collection attempts over the phone and by mail. Debt buyers, including Midland, are also suing consumers in court to collect the debts they buy. However, people are often unable to afford lawyers to defend the claims and cases end in default judgments, damaging credit and putting people at risk of having their wages garnished.
The settlement resolves the states investigation into Midland’s collection and litigation practices. Much like the conduct observed during the mortgage crisis, the agreement settles claims that Midland signed and filed affidavits in state courts in large numbers without verifying the information printed on them, a practice commonly referred to as “Robotic signature”.
The settlement requires Midland to reform its affidavit signing and litigation practices. Midland should carefully verify the information in affidavits and present accurate documents in legal proceedings. When Midland takes legal action, it must have the accounting records regarding the debt before filing the case, including the amount of the debt, proof of an agreement, and an explanation of why the additional charges are warranted. .
As part of the settlement, Midland will eliminate or completely reduce judgment balances by approximately 5,136 Georgian consumers for a value of $ 8,729,180 in cases where Midland used an affidavit against them in court between 2003 and 2009. Midland will notify affected consumers by mail of the reduction in the balance and no further action is required on the part of the consumer.
In addition, Midland will set aside $ 25,000 per state to compensate consumers who may have paid Midland money they did not owe. This includes the following:
- Consumers who have made a payment to Midland on a debt that was not actually owed by the consumer and which has not been repaid;
- Consumers who made a payment to Midland in excess of what was owed by the consumer and which was not refunded; Where
- Consumers who made payment to Midland after Midland submitted an affidavit in a collection action and amounts allegedly owed by the consumer as reflected in the affidavit do not accurately reflect the statements of Midland’s account regarding the consumer debt at the time of the signing of the affidavit.
Consumers who believe they are eligible for compensation under the settlement must complete and submit the Claim Form Downloadable from the website of the Consumer Protection Division of the Georgia Department of Law at: www.consumer.ga.gov.
The settlement also offers protections to consumers that Midland perceives, even if they are not sued. All consumers should receive accurate information about valid debts. If a consumer disputes a debt that Midland is collecting, the settlement requires Midland to review the original account documents before continuing with its collection efforts. Midland must provide these supporting documents to the consumer free of charge. The regulation requires Midland to maintain appropriate oversight and training of its employees and the law firms it employs. The deal prohibits Midland from reselling its debt for two years. In addition, Midland has agreed to pay the states $ 6 million, including Georgia’s share is $ 177,781.
The Attorneys General of Alaska, Alabama, Arizona, Arkansas, Colorado, Connecticut, Delaware, District of Columbia, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Michigan, Mississippi, joined Georgia in today’s settlement. Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont , Virginia, Washington, Wisconsin and Wyoming.