Maryland's District Courts are putting a halt to an estimated 900 collection lawsuits after Catonsville, Md.-based Sunshine Financial Group, the company that filed them, failed to get a license.
Sunshine Financial buys consumer debts and collects by suing. Maryland's Department of Labor, Licensing and Regulation turned down the company for a collection agency license this month.
The state agency said Sunshine Financial filed affidavits in cases that "misled and deceived" consumer defendants and the courts about issues ranging from the amount owed to whether the company could prove it had the right to collect.
District Court Chief Judge Ben C. Clyburn also ordered the courts this week to put a stay on all the company's pending cases until further notice, preventing further action — such as judgments being entered against consumers. Notices will be sent to defendants. The cases ultimately could be dismissed.
Sunshine Financial's owner, J. Scott Morse, can appeal the license decision. If he does not, it becomes final. Morse was not available to comment.
Last year the state issued a warning to debt buyers that have filed lawsuits against Maryland consumers without getting a collection agency license.
In January 2010, Clyburn dismissed more than 27,000 Maryland cases handled by Mann Bracken after the Rockville, Md. collection law firm collapsed. In March, debt buyer Midland Funding agreed to drop just more than 10,000 cases against Maryland consumers to settle a class-action lawsuit, though it admitted no wrongdoing.
