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Attorney General Josh Shapiro announced today that Pennsylvania and 41 other states and the District of Columbia have reached a $6 million settlement with Encore Capital Group, Inc. and its subsidiaries Midland Credit Management, Inc. and Midland Funding, LLC, which collectively form one of the nation’s largest debt buyers. The settlement requires the companies to make key reforms to how they collect consumers’ debts and eliminates over $256,000 in debts owed by 155 Pennsylvanians.
“The legal action we are taking today is a big step toward making debt collectors and buyers treat consumers fairly,” Attorney General Shapiro said. “There are 155 Pennsylvanian consumers receiving relief through this settlement, and there may be other consumers who are eligible. “
As part of the settlement, Midland will completely eliminate or reduce the judgment balances of 155 Pennsylvania consumers for a total value of $256,770.00 in cases where Midland used an affidavit against them in court between 2003 and 2009. Midland will notify impacted consumers by mail of the balance reduction and no further action is necessary from the consumer. In addition, Midland will set aside $25,000 per state to compensate consumers who may have paid Midland money that the consumer did not owe.
Under federal and state laws, though, none of the debt would appear on a credit report. The settlement amounts to about $1600 per consumer affected with only $25,000 available for unknown victims of the allegations made in Pennsylvania.