The attorneys general of 42 states and the District of Columbia (collectively the states) have one Assurance of voluntary compliance / assurance of employment (Agreement) with Encore Capital Group, Inc. and its subsidiaries Midland Funding, LLC and Midland Credit Management, Inc. (collectively Midland) to resolve allegations related to Midland’s debt collection practices. Corresponding a press release of Illinois AG, which names Midland as one of the largest debt buyers in the country, Midland has “conducted a pattern of signing and filing affidavits in state courts against consumers in bulk without verifying the information printed therein – a practice that commonly referred to as robosigning. ”

The agreement obliges Midland to pay US $ 6 million to states which, in the sole discretion of their AGs, “will be used to reimburse attorneys’ fees and / or investigative costs, used for future public protection purposes, placed with consumers, or applied”. Enforcement fund, consumer education, litigation or local consumer aid fund or revolving fund or similar fund [for consumer protection purposes]. ”Midland is also required to internally set aside $ 25,000 per state for consumer repayment and to provide up to $ 1,850 in credit on the outstanding balance of certain judgments it has obtained on disputed debt.

The agreement sets out several requirements for Midland’s collection practices, including the following:

• Midland cannot collect a claim or attempt to collect a claim unless it has the information provided in the agreement

• In the circumstances specified in the agreement (including the consumer’s dispute over the debt, the purchase of the debt through a contract of sale without meaningful representations and warranties as to the correctness or validity of the debt or without meaningful obligation to provide original documents at the account level or in a portfolio, from If Midland knows that it contains unprovable or materially inaccurate information about the debt), Midland cannot claim that a consumer owes a debt or the amount thereof without verifying certain information at the account level

• For accounts that Midland has not yet commenced debt collection activity, Midland cannot commence this activity without determining whether and if the debt has special status (i.e. bankruptcy, deceased consumer or consumer who is an active service member) if the debt is determined to have such a status, Midland must meet certain conditions in order to recover the debt

• Until September 2020, Midland can only resell debt to anyone other than a legal entity described in the agreement (for example, to a legal entity that originally sold the debt to Midland).

• Midland must not initiate a debt collection action unless it has identified the documents in its possession and provided certain information to the consumer and must provide specific instructions to any lawyer it uses to conduct debt collection on its behalf

• Midland partners are not permitted to sign an affidavit in connection with any debt collection process unless the facts disclosed in the affidavit are based on a review of relevant records held by Midland and on personal knowledge “obtained through those records which actually checked by the partner and on which he relied. ”

• Midland may not give employees or third party service providers any incentives based solely on the volume of affidavits drawn up, verified, executed or notarized.

• Midland’s procedures for creating and using affidavits in debt collection procedures must require the employees who review and sign affidavits to perform certain tasks, such as:

• Midland cannot knowingly pursue or threaten to pursue a statute-barred debt collection process, and any communication with consumers about statute-barred debt must include specific information

Other regulations require Midland to comply with the FDCPA, the FCRA, and applicable state laws in relation to its collections activities, staff appropriate disputes and consumer resolution teams, maintain a mandatory training program for its employees, and conduct call surveillance.

In a press release of the settlement, Midland stated that “[t]he issues that gave rise to the settlement have not been the company’s practice for nearly 10 years “and although it believes its practices comply with relevant law,” has chosen to agree to a settlement so that we can all move forward. The press release also states that almost all of the operational requirements of the agreement are already part of Midland’s current practice and most of the requirements were implemented during or prior to Midland’s negotiations with the AGs.