Minn. settles lawsuit with debt collection company

Published 10:45 am Thursday, December 13, 2012

MINNEAPOLIS — A company that buys bad debts has agreed to change its collection practices after the state of Minnesota accused it of filing unreliable court papers and carelessly targeting people for debts they didn’t owe, Attorney General Lori Swanson announced Wednesday.

Midland Funding LLC, one of the largest debt buyers in the country, has filed over 15,000 lawsuits against individuals in Minnesota courts since 2008.

Midland employees admitted in sworn testimony that they signed up to 400 mass-produced affidavits a day either without reading them, without knowing what they contained, and/or without verifying whether they contained accurate information, Swanson’s office said in a statement.

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In a lawsuit filed on behalf of the state, Swanson called the practices “robo-signing.”

The company’s lack of verification and reliance on incomplete and/or inaccurate information resulted in many people being sued for debts that they either never owed or paid off long ago, and consumers feeling forced into settlements for much more than the original debts because of growing interest and attorneys’ fees, the lawsuit alleged.