Minnesota debt collector used illegal debt collection tactics

This week, Attorney General Lori Swanson announced that Midland Funding, a company known for suing Minnesota residents and then garnishing wages immediately, has agreed to amend its collection practices. This agreement comes after the state of Minnesota brought a lawsuit against the company for filing unreliable papers in court and then targeting individuals over debts they did not have.

Employees from Midland have offered sworn testimony that they signed nearly 400 affidavits without reading them or verifying the information on the mass-produced documents. This is "robo-signing," very similar to the mortgage tactics that helped bring about the foreclosure crisis.

Midland Funding's actions led the company to sue many people for debts they had already paid off or no longer owed. Even those that owed debts felt forced to agree to settlements that were above and beyond the debts they had previously owed.

The company has now agreed to alter its practices, including:

  • Verifying information before collecting on debts
  • Providing full information to alleged debtors regarding the debts
  • Giving debtors the option to dispute the debt
  • Verifying the validity of all information before signing and filing affidavits in court

Midland Hills makes money by buying debts from larger companies that have written off the debts. It then turns around and collects on the debts at a much higher rate than it pays for the debts. This is a legal practice. The part that is illegal is the way it has collected on the debts in the past.

Therefore, Midland Hills will be able to continue to collect on debts it has bought as long as it does so in the way outlined above. Many individuals find themselves facing debts they owed in the past and believed their creditors had written off. If you find yourself in this situation, are over your head in debt, and are facing creditor harassment from a company like Midland Hills, you may want to consider filing for Chapter 7 or Chapter 13 bankruptcy. Bankruptcy stops creditor harassment, puts an automatic stay on any collection efforts against you and can even lead to the discharge of the debt altogether.

Learn more by visiting our pages on filing for bankruptcy in Minnesota.

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

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