Minnesota AG settles robo-signing lawsuit with debt collector
MINNEAPOLIS (KMSP) -
Debt buying company Midland Funding has agreed to change its collection practices to settle a lawsuit filed by the state of Minnesota, accusing the company of "robo-signing" court documents and sometimes targeting the wrong people for payment of old bills.
Midland Funding has filed more 15,000 lawsuits against individuals in Minnesota courts. The company buys old, charged-off debt from banks and phone companies and credit card companies, including Bank of America, JP Morgan Chase, Citibank and Wells Fargo.
"This lawsuit was about respect for the legal system," Attorney General Lori Swanson said. "In its rush to quickly collect old debts that it purchased for just a few pennies on the dollar, the company ignored legal requirements designed to protect the rights of an individual in court."
Under a consent judgment signed by a Hennepin County judge, Midland agreed to verify its information before attempting to collect on debts. They also agreed to give people the chance to dispute illegitimate demands for payment.
Midland will pay the state $500,000 as part of the settlement.