Encore Enters $6M Settlement Agreement with 42 State AGs, DC AG in Affidavit Robosigning Matter

Yesterday, Encore Capital Group, Inc. (Encore) entered into a $6 million settlement agreement with several state Attorneys General. The matter involved Encore, its subsidiaries Midland Funding, LLC and Midland Credit Management, Inc., and 42 states (see list below) and the District of Columbia. In addition to the $6 million, Midland must also internally set aside $25,000 per state for restitution to consumers. According to a press release by the Illinois Attorney General, this investigation revolved around the alleged practice of “robosigning” affidavits used in collection litigation.

The settlement agreement sets forth certain requirements for Midland. A large portion of the agreement discusses requirements that largely parrot the text of the Fair Debt Collection Practices Act (FDCPA) and the Fair Credit Reporting Act (FCRA).

In relation to collection litigation, the agreement requires Midland to, among other things, ensure it has account-level documentation prior to commencing lawsuits against consumers and that such documentation is available to its retained law firms without restriction. Midland must also ensure that any affidavit filed is hand-signed and based on the affiant’s personal knowledge from reviewing account records. Midland cannot pay incentives to its employees or third-party providers based on volume of executed affidavits.

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