Home >

December 4, 2018

For More Information, contact:
Mike Lewis (334) 353-2199
Joy Patterson (334) 242-7491
Steve Marshall
Page 1 of 2
Alabama Attorney General

Attorney General Steve Marshall Announces $6 Million National
Settlement with Encore Capital, Midland Credit Management,
Midland Funding to Reform Debt Buying and Collection Practices
A total of $784,920 in Debt to Be Forgiven for Over 450 Alabama Consumer Accounts
(MONTGOMERY)–Attorney General Steve Marshall announced today that Alabama
has joined 36 states and the District of Columbia in reaching a $6 million settlement
with Encore Capital Group Inc. and its subsidiaries Midland Credit Management Inc.
and Midland Funding LLC, one of the nation’s largest debt buyers.
In Alabama, a total of $784,920 in debt will be fully or partially forgiven for 464
Alabama accounts for judgments that were entered against consumers in cases where
Midland used an affidavit against them in court between 2003 and 2009. Of these, 145
Alabama accounts will receive full forgiveness of a total of $194,760 in debt. Midland
will notify impacted consumers by mail of the balance reduction and no further action
is necessary from the consumer.
Additionally, $25,000 for each state will be set aside for restitution for those who paid
Midland a debt they did not owe, for those who paid more than was owed, or for those
against whom Midland used an affidavit in legal proceedings that was inconsistent
with the information in its own records. Alabama consumers seeking restitution from
this fund may contact Attorney General Marshall’s Consumer Interest Division by
calling 1-800-392-5658, by writing to 501 Washington Avenue, Montgomery, Alabama,
36104, or by submitting an online complaint to the Consumer Interest Division at
www.ago.alabama.gov/consumercomplaint. The Attorney General’s Office will then
submit those claims to Midland for review. When submitting a claim for restitution to
the Attorney General’s Office, it is important for consumers to provide any and all
documents that will support their claims.
Debt buying involves buying and selling overdue debts from creditors and other
account owners. Often purchased for pennies on the dollar, debt buyers seek to recover
the full balance from consumers through collection attempts by phone and mail. Debt
buyers, including Midland, also take consumers to court to collect the debts they
purchase. However, people are often unable to afford attorneys to defend the
allegations and cases result in default judgments, hurting credit and putting people in
jeopardy of having their wages garnished.
501 Washington Avenue * Montgomery, AL 36104 * (334) 242-7300
www.ago.state.al.us Page 2 of 2

The settlement resolves the States’ investigation into Midland’s collection and litigation
practices. Much like the conduct witnessed during the mortgage crisis, the agreement
settles claims that Midland signed and filed affidavits in state courts in large volumes
without verifying the information printed in them, a practice commonly called robo-
“This settlement is important in the reforms it is mandating to restore fairness and
justice to future debt collection practices by Midland, and for the compensation to be
provided to those who were dealt with unfairly and dishonestly,” said Attorney
General Marshall. “I am proud of the outstanding work done by the staff of my
Consumer Interest Division to reach this important agreement.”
The settlement requires Midland to reform its affidavit signing and litigation practices.
Midland must carefully verify the information in affidavits and present accurate
documents in court proceedings. When Midland files a lawsuit, it must have account
documents about the debt before it files the case, including the amount of the debt,
proof of an agreement, and an explanation for why any additional fees are justified.
The settlement offers protection to consumers Midland is collecting from, even if they
are not being sued. If a consumer disputes a debt Midland is collecting, the settlement
requires Midland to review original account documents before it continues its collection
efforts. Midland must provide these substantiating documents to the consumer at no
charge. The settlement requires that Midland maintain proper oversight and training
over its employees and the law firms that it uses. The agreement prohibits Midland
from reselling debt for two years.
Joining today’s settlement were attorneys general from Alaska, Arkansas, Colorado, the
District of Columbia, Florida, Georgia, Iowa, Idaho, Illinois, Indiana, Kentucky,
Louisiana, Maine, Michigan, Missouri, Mississippi, North Carolina, North Dakota,
Nebraska, New Hampshire, New Mexico, Nevada, Oklahoma, Oregon, Pennsylvania,
Rhode Island, South Carolina, South Dakota, Tennessee, Virginia, Vermont, Wisconsin,
New Jersey, Utah, Washington, and Wyoming, as well as the Hawaii Office of
Consumer Protection.