Encore Capital Group Enters into Consent Order with CFPB

Encore Capital Group Inc. and its subsidiaries Midland Credit Management Inc., Midland Funding LLC and Asset Acceptance Capital Corp. have reportedly entered into a voluntary Consent Order with the Consumer Financial Protection Bureau over their allegedly improper debt collection practices.

The CFPB, after reviewing the practices of Encore and its subsidiaries, found that the companies violated portions of the Consumer Financial Protection Act, the Fair Debt Collection Practices Act, and the Fair Credit Reporting Act.

If you received a letter or check in the mail from the Midland CFPB Settlement Administrator, your account has been identified as one that was affected by the Encore defendants’ allegedly illegal debt collection practices.

Eligibility for redress was determined on the following criteria: 1) Encore’s use of the word “settlement” in certain debt collection letters, or 2) Encore’s reference to a consumer’s failure to dispute a debt during the FDCPA’s validation period without providing additional information about the related FDCPA provisions.

According to the CFPB’s Consent Order, Encore purchases old consumer debt, which primarily consist of charged-off consumer credit card and telecommunications debts. With the purchase of these debt portfolios, Encore would receive an electronic spreadsheet that includes information about consumers, including names, addresses, Social Security numbers, amount of the debt, contract interest rate and dates of origination and default.

Encore’s purchase agreements reportedly limit the debt seller’s responsibility for the accuracy of the accounts in question. The sellers may have made disclosures that the debt amounts were only an estimate or indicated that the statutes of limitation for debt collection on some accounts had run, but they reportedly did not indicate which accounts were affected.

“In numerous instances, Debt sellers have provided data files to Encore containing inaccurate information as to the identity of the Consumer obligated to pay the Debt, the age of the Debt, the amount of the Debt, the interest rate, and other material information about the Debt,” the Consent Order states. “Nevertheless, Encore has continued purchasing Consumer Debt from these sellers.”

Encore has reportedly received tens of thousands of complaints about its debt collection practices.

The CFPB ordered the Encore defendants to compensate consumers who were affected by the allegedly illegal debt collection practices. The Encore defendants have also agreed to stop all collection activities on the affected accounts.

If you have questions about the judgment or the check you received in the mail, you can contact the settlement administrator at 1-888-573-7130 or by writing to Midland CFPB Settlement Administrator, P.O. Box 43409, Providence, RI 02940-3409.

More information is also available at the settlement website.

The Midland Credit Management Debt Collection Lawsuit is In the Matter of: Encore Capital Group Inc., Midland Funding LLC, Midland Credit Management Inc., and Asset Acceptance Capital Corp., File No. 2015-CFPB-0022, in the U.S. Consumer Financial Protection Bureau.