TALLHASSEE – Midland Credit Management Inc. and Midland Funding LLC, whose parent company, Encore Capital Group Inc. is among the leading firms in the consumer debt purchasing industry, recently reached a settlement with Attorney General Pam Bondi and 41 other state attorneys general and the District of Columbia after fighting in the courtroom for over five years, a Dec. 4 news release from Bondi's office said.
Midland Management and Midland Funding were investigated by the states for their collection and litigation practices. Under the settlement, Midland will have to mail consumers a balance reduction for its mishaps, the news release said.
“This multistate, multimillion dollar settlement establishes further safeguards to protect future borrowers from bad collection practices, in addition to providing judgment relief to existing debtors,” Bondi said in the release.
According to the court documents about the settlement, Midland is not allowed to employ any deceptive means in an attempt to collect a debt. As of the effective date, Dec. 14, Midland is required to train an appropriate number of representatives who will resolve debt disputes, and all employees must receive a background check before having personal contact with consumers.
The settlement also stated that Midland will have a mandatory training program for newly hired collection representatives. In the training program, Midland must cover state and federal laws such as the Consumer Financial Protection Act and the Gramm-Leach-Bliley Act.
Florida and the other states involved in the case investigated Midland for robo-signing documents, a practice in which a company signs affidavits of consumers without verifying the actual amount owed to debt collectors, the news release said.
As a result of the settlement, Midland has to reduce the judgment balances for more than 1,200 Florida consumers' accounts, which is about $2 million. Midland is also required to pay $6 million directly to the other states involved, the release said.
The release said that under the terms of the settlement, Midland has to provide accurate information about valid debts and the corporation must carefully review original account documents before committing to any attempt to collect a debt.