The debt collection business has change fundamentally over the past few years with more and more creditors selling debt at a discount to debt buyers rather than trying to collect it themselves. Although this is a convenience for them (half a loaf, and all that) it does present problems for debt buyers when debtors actually stand up to the bully and fight!
These debt buyers have also been getting in trouble for their tactics, as was seen when the Consumer Financial Protection Bureau sued Encore Capital Group (the owner of Midland Funding, Midland Credit Management, and Asset Acceptance Capital). A settlement entered on September 9, 2015, resulted in Encore paying millions in refunds and penalties.
But even more interesting than this development (which, considering how much money these companies make, was a slap on the wrist) are the facts that came to light about these companies through the litigation. If you are being pursued by any of these companies, these are things you need to know!
- They pay about 3 cents on the dollar for every debt they buy.
- They do not receive any actual documentation on the debts they buy.
- In many cases NO documentation exists to prove the debt.
- When they buy a debt, the original creditor does not verify the amount due or whether the claim is still within the statute of limitations! So Midland doesn’t know if the balance claimed due is correct or even if they can still legally sue!
- It does not independently verify the information provided on the debt to make sure it is accurate.
- It continues to buy debts from creditors that have provided inaccurate information in the past.
- It does not provide its lawyers with the information necessary to prove its case and prohibited them from contacting the original creditors in order to do so.
- When debtors actually fight back and Encore does not have the evidence to prove the debt, they have instructed their lawyers to dismiss the claim!
These facts show that a collection lawsuit against you by Encore, Midland Funding, and its other subsidiaries, is often a House of Cards that will collapse if you shake the table by disputing it in court. For more information on the CFPB suit against Encore and what it revealed, check out Jay Fleischmann’s article here.
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If you live in southern New Jersey, are being sued for $8,000 or more, and want a lawyer to represent you against your creditors, either to fight the debt or make a deal, then call my office at 856-432-4113 or contact me through this site to schedule an appointment to come in. I have represented creditors for many years and am familiar with the collection industry and how it ticks. Put my experience to work for you!