Collection agency Resurgent Capital Services LPA and affiliated debt buyer LVNV Funding LLC will pay $1 million to Maryland regulators and agreed to dismiss several thousand collection cases to resolve alleged violations of federal and state collection laws.
Resurgent Capital, based in Greenville, S.C., and LVNV Funding in Las Vegas will dismiss 3,564 cases pending in Maryland district courts totaling $7.7 million in claims but will be able to re-file them, under the agreement announced Monday with the Maryland Commissioner of Financial Regulation. The companies also agreed to give more than $3.8 million in credits to more than 6,200 consumers whose cases already have been settled or adjudicated.
The voluntary settlement is with the Maryland State Collection Agency Licensing Board (CALB). The Commissioner of Financial Regulation oversees the CALB. Both are part of the Maryland Department of Labor, Licensing and Regulation.
In October 2011, Maryland regulators suspended the collection licenses of the two companies and ordered them to stop collecting from consumers in the state (see story). The companies were cited for violations of several collection laws, including filing "false, deceptive or deficient affidavits" in court cases, misrepresenting the amount owed and collecting unauthorized attorney fees.
In September 2011, LVNV settled a class-action lawsuit by agreeing to forgive about $10 million in debt it had tried to collect from 3,500 Maryland consumers (see story). A key part of the suit was that the company received its collection license after filing thousands of cases in the state. LVNV did not admit any wrongdoing.
In Monday's settlement, both companies denied any liability and wrongdoing. The voluntary agreement does not constitute any admission of liability on their part. Both companies are part of New York-based Sherman Financial Group LLC. LVNV Funding’s and Resurgent Capital Services’ collection agency licenses will be fully reinstated as part of the agreement.
“We are pleased that we have been able to reach such a positive and amicable resolution of all outstanding issues with” the Maryland Department of Labor, Licensing and Regulation, said Tom Thurmond, Resurgent Capital Service’s executive vice president, in a statement. “We are committed to working proactively with all regulators in a manner that reflects our dedicated concern for consumer protection and our commitment to ethical corporate behavior.”