WASHINGTON—The Consumer Financial Protection Bureau has filed a lawsuit against Encore Capital Group, Inc. and its subsidiaries, Midland Funding, LLC; Midland Credit Management, Inc.; and Asset Acceptance Capital Corp.
The companies, which are headquartered in San Diego, together comprise the largest debt collector and debt buyer in the United States, with annual revenue exceeding $1 billion and annual net income exceeding $75 million, according to the Bureau.
Encore and its subsidiaries are currently subject to a 2015 consent order with the Bureau based on its previous findings they violated the Consumer Financial Protection Act (CFPA), Fair Debt Collection Practices Act (FDCPA), and Fair Credit Reporting Act. The Bureau alleges that Encore and its subsidiaries have violated the terms of the consent order and again violated the FDCPA and CFPA.
The CFPB’s complaint seeks injunctions against them, as well as damages, redress to consumers, disgorgement of ill-gotten gains, and civil money penalties.
The Bureau’s complaint, filed in federal district court in the Southern District of California, specifically alleges that since September 2015, Encore and its subsidiaries violated the consent order by suing consumers without possessing required documentation, using law firms and an internal legal department to engage in collection efforts without providing required disclosures, and failing to provide consumers with required loan documentation after consumers requested it.
Additional Allegations
The Bureau has further alleged the companies violated the consent order, the CFPA, and the FDCPA by suing consumers to collect debts even though the statutes of limitations had run out on those debts and violated the consent order by attempting to collect on debts for which the statutes of limitations had run without providing required disclosures.
In addition, the CFPB alleged the companies violated the CFPA by failing to disclose possible international-transaction fees to consumers, thereby effectively denying consumers an opportunity to make informed choices of their preferred payment methods. The Bureau also alleges that each violation of the consent order constitutes a violation of the CFPA.
A copy of the complaint filed in federal district court in the Southern District of California is available here.