Minnesota wins settlement against major debt collector

A leading debt collection company has reached a settlement with the state of Minnesota to pay $500,000 due to its alleged "robo-signing." This is when the company allegedly signs paperwork for collection suits without verifying basic facts and signatures, according to the Star Tribune.

Minnesota Attorney General Lori Swanson spoke at a conference and described the illegal practices of Midland Funding LLC, the Minnesota-based collections company, as well as the prevalent controversies undergoing the debt collection industry.

This settlement is potentially the first of its kind, as a government lawsuit between these type of companies has never been initiated. Midland, owned by debt-buying firm Encore Capital Group Inc., did not admit to any improper or illegal actions.

The attorney general sued the company last year after a yearlong investigation exposed the non-compliant practices. Midland gains nearly $38 million against Minnesota residents in court when suing them for debts.

"I think what it does, it shines a very bright spotlight on the problems that the federal regulators and states across the country have been seeing with respect to debt buying and this zombie debt kind of stuff," Ron Elwood, supervising attorney at the Legal Services Advocacy Project, told the source about the settlement.

Businesses need to ensure their practices comply with all regulations

Whether legislation is on a state or federal level, companies need to follow all compliance efforts. Otherwise, investigations may occur and a business may be left with a financial penalty or a lawsuit. When signing a contract or any other paperwork, employers and staff need to verify all printed information.

Arizona companies that work with a Phoenix business law attorney will gain the legal representation necessary for presenting a case in the courtroom.

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