Debt Collection Servicers Settle CFPB Charges for Improper Practices

Encore Capital Group and its subsidiaries, Midland Funding, Midland Credit Management and Asset Acceptance Capital Corp. settled CFPB charges for improper debt-collection acts and practices.

As previously covered, the CFPB alleged that the companies, in violation of a previous Consent Order, did not (i) possess the required documentation before suing consumers or (ii) provide consumers with required disclosures. The CFPB alleged that the companies also falsely stated that they would provide consumers with Original Account Level Documentation within 30 days of a request. The CFPB alleged that the companies sued consumers for time-barred debts that were legally unenforceable.

As described in the Order, the companies agreed to (i) pay redress of over $78,000, (ii) pay a $15 million civil money penalty, and (iii) cease and desist from future violations of Sections 1031 ("Prohibiting unfair, deceptive, or abusive acts or practices") and 1036 ("Prohibited acts") of the Consumer Financial Protection Act, or Sections 807, 807(2)(A), 807(5), and 807(10) of the Fair Debt Collection Practices Act. Additionally, the companies agreed to certain conduct provisions, including reporting requirements and compliance monitoring.