Minnesota Attorney General Lori Swanson alleged in a legal action filed Monday that Midland Funding LLC defrauded consumers and the courts by filing false "robo-signed" affidavits to try to prove that consumers owed debts.
In a press release issued Monday, Swanson's office alleged Midland created "phony, slopping and fraudulent documents in Minnesota courts" including unreliable mass-produced affidavits to try to obtain judgments or extract payments from consumers. Many lacked legal representation and some had no knowledge of any alleged debt, according to Swanson's office.
Midland and its publicly-traded parent, Encore Capital Group Inc., have paid more than $1.8 billion to obtain 33 million customer accounts with a face value of about $54.7 billion, or an average cost of about three cents on the dollar, according to the Attorney General's office, based on company regulatory filing.
Encore is the nation's largest buyer of delinquent credit card and consumer accounts, based on annual revenue, according to Collections & Credit Risk. Last month, the company announced its' financial results had beaten quarterly and yearly expectations
Company officials could not immediately be reached for comment. Last week the company announced it had created a "Consumer Bill of Rights" - a document outlining the firm's comment to conduct business ethically (
Robo-signing is the term now commonly used to describe signing off on mass-produced, computer-generated legal documents without reading them or verifying the accuracy of contents "as a way to speed up the collection process," according to Swanson's office. The Minneapolis Star-Tribune first reported the legal action early Monday.
