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Debt collection company used robo-signing, other wrongful tactics

A debt collection company well known for bringing lawsuits and garnishing the wages of Minnesota residents has agreed to stop its questionable practices after it faced a lawsuit from Attorney General Lori Swanson.

The company, Midland Funding, LLC, buys bad debts from other companies and then collects on the debts by suing debtors and immediately garnishing their wages. Those practices are legal. What put the company under government scrutiny was the way they collected on the debts.

According to sworn testimony, Midland employees admit to signing nearly 400 affidavits that were mass-produced. Employees did not read these affidavits to verify that the information they contained was accurate. This is another example of "robo-signing," which was central to last year's mortgage settlement.

According to the lawsuit, many Minnesota residents were sued based on inaccurate information in the affidavits. They had either paid the debts already or did not owe on the debts.

Midland Funding has agreed to pay $500,000 to the state, resolve outstanding complaints with the attorney general's office and revise their collection practices. This includes verifying all information before collecting on debts or filing affidavits with the Minnesota courts, giving debtors a chance to dispute collection efforts and providing full information to debtors.

If you face harassment from a debt collection company, you have options. If you do not owe on the debt, you can bring a complaint against the company to stop them from contacting you. Even if you do owe on the debt, you may still be the victim of creditor harassment. Creditors must follow certain federal and state laws when collecting on a debt. Failure to do so is illegal.

Learn more about creditor harassment by visiting our web page on debtor / creditor actions.

Source: Star Tribune, "Debt collector Midland Funding agrees to change its practices to settle Minnesota lawsuit," Steve Karnowski, Dec. 12, 2012

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