If you’ve been sued, make sure you follow MN AG Swanson’s suit against Encore / Midland Funding

Aside from the signing of affidavits by people who have no personal knowledge of the debts, another important issue is that collectors often demand that consumers prove that they don’t owe the debt INSTEAD of proving that they do owe the debt.

Minnesota sues debt collector for robo-signing

By Jonathan Stempel

NEW YORK | Thu May 19, 2011 2:04pm EDT

(Reuters) – Minnesota sued Encore Capital Group Inc, one of the largest U.S. debt collectors, for allegedly using fraudulent “robo-signed” affidavits in collection cases, a practice that critics say also infects home foreclosures.

Thursday’s lawsuit against Encore’s Midland Funding LLC and Midland Credit Management Inc units follows a ruling by an Ohio federal judge that Minnesota’s case would not interfere with a $5.2 million class-action settlement of similar claims.

“Midland has perverted the justice system by filing robo-signed affidavits in court and hounding citizens for debt they don’t owe,” Minnesota Attorney General Lori Swanson said.

Encore Chief Executive Brandon Black in an emailed statement said the company changed its affidavit process in 2009, believes its practices are “legally sound,” and will work with Swanson to resolve the matter. He added that “because 95 percent of consumers ignore letters sent by the company, the legal channel is often the only remaining option.”

Based in San Diego, Encore often buys debt from credit card companies. Through year-end, it had invested about $1.76 billion to buy 33 million accounts with a face value of $54.7 billion, or about 3 cents on the dollar.

In her lawsuit filed in a Hennepin County, Minnesota, court, Swanson said Midland workers testified under oath to having signed up to 400 affidavits a day without reading them.

She also said the Midland units “often force individual citizens to prove they do not owe money instead of themselves substantiating that the citizens actually owe the money.”

The lawsuit seeks a halt to improper practices, and fines of $25,000 per violation and for contempt of court.

In the federal case, U.S. District Judge David Katz in Toledo, Ohio had previously issued an order that put some litigation relating to robo-signing claims on hold.

But in his ruling Wednesday, he said that order could not cover sovereign entities, and thus “cannot be read to encompass the state of Minnesota.”

All 50 states are investigating robo-signing and other improper practices by banks in the mortgage industry.

In afternoon trading, Encore shares were up 54 cents, or 1.8 percent, at $31.00 on the Nasdaq.

The Minnesota state case is Swanson v. Midland Funding LLC, Hennepin County District Court. The Ohio federal case is Brent v. Midland Funding LLC, U.S. District Court, Northern District of Ohio, No. 08-01434.

(Reporting by Jonathan Stempel in New York; Editing by Tim Dobbyn and Gerald E. McCormick)

I applaud AG Swanson for being one of the very few AGs who actually do their job.  Most courts have turned into collection agencies, entering judgments against consumers without any admissible evidence whatsoever.

Most judges wouldn’t recognize justice if it hit them in the face and they have nothing but contempt for consumers who cannot afford to pay attorneys to defend them.

4 Responses to “If you’ve been sued, make sure you follow MN AG Swanson’s suit against Encore / Midland Funding”

  1. […] I just posted: If you’ve been sued, make sure you follow MN AG Swanson’s suit against Encore / Midland Funding […]

  2. Currently I am a client of Nelson & Kennard Law office. I read the article you posted and it doesn’t surprise be one bit. It only confirms my doubts regarding their services. This explains why my company can never receive copies of “Proof of Service”. When I call to speak to the Attorney in charge of the office, she always gives me some excuse to brush me off. Nelson & Kennard Law office has numerous files of mine. Some of them have been entered into judgments with wrong amounts, writs expire because they worte the wrong amount on the check to the sheriff???? Atleast this is what I’m told from their office, people not getting serve to the right address, my company got sued because Scott Kennard filed an out of stats case, but when we sent it over it was well in stats. It took them a whole year to file the complaint just so that my company will end up getting sued for $6000.00 for violating the FDCPA on Scott Kennards behalf, which my company paid the full amount and not a cent from Kennards office. Now I’m in a battle on my own with this office to relaease my files but they refuse because we have an outstanding bill with them due to the fact that their accounting is so screwed up. Law office of Nelson & Kennard did not send me invoices for two consecutive YEARS after demandinG invoices from them every month. Now they hold this against my company and they will not release my files instead they said their is an Attorney lein agreement!!!

  3. Have you filed a complaint with the State Bar?

    And of course they owe you the $6,000 for the FDCPA suit and the amount NOT recovered.

    And posting here is a good first step, I would put the “Nelson & Kennard” experience all over the web — just make sure you statements are true. It’s easy enough to document that they filed suit AFTER the SOL expired and that you ended up paying. They need to clean up their act.

    Feel free to contact me directly if you’d like assistance.

  4. And of course here is the Nelson & Kennard blog:


Leave a Reply