Midland Credit Management Inc. reached a settlement with the New York City Department of Consumer Affairs (DCA) related to an investigation of the companys collection practices that started in 2012.
The consent order outlines the details of the settlement, including that, "the parties wish to completely settle, release and discharge all claims and any disputes and disagreements between Midland and the Department with respect to Midlands business activities in New York City."
The DCA had started an investigation based on information it learned related to pending legal actions in other jurisdictions, according to a department spokesperson, who added that, "DCA discovered that Midland filed robo-signed affidavits in [New York City] court in their debt collection cases. The problems were uncovered during the renewal process for Midlands licenses in New York.As part of the settlement, Midland agreed to conduct an audit of randomly selected cases it has filed against consumers to verify the case involves the correct person, the correct amount of a rightfully owed debt and that the case is within the applicable statute of limitations period. If any material inaccuracies are found during the audit, Midland promised to correct them.
The settlement agreement requires that Midland complete the audit and provide a report to the DCA by Sept. 30.
Midland also must provide the DCA with the training materials used to train its in-house collectors who engage in collection activities in New York City. The consent order further requires that Midlands in-house collectors undergo 100 hours of training before they engage in collection practices in New York City.
Midland also must provide relevant and appropriate training materials to its third-party debt collection agencies and law firms engaged in debt collection activities in New York City. The third-party debt collection agencies working with Midland will need to provide an annual training based on these materials.
Midland is responsible for $420,000 in civil penalties ($60,000 for each of its seven licenses) and $250,000 for the DCAs investigation costs.
Midland is a subsidiary of Encore Capital Group.