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Robo-Signing Affects Collection Affidavits

Recently the State of Minnesota sued one of the largest collection agencies in the U.S. alleging the company used false and unreliable mass-produced affidavits as proof in consumer debts lawsuits. The suit was filed by the Minnesota Attorney General and states that Midland Funding, LLC and Midland Credit Management “aggressively filed thousands of lawsuits against individual citizens for collection of old, purchased debt, often supporting those lawsuits with ‘robo-signed’ affidavits.” The Minnesota lawsuit seeks an injunction to stop the fraudulent practice, and $25,000 in fines per occurrence. The Midland companies named in the lawsuit are subsidiaries of San Diego based Encore Capital Group, Inc., a publicly traded company. Reuters reports that “through year-end, [Encore] had invested about $1.76 billion to buy 33 million accounts with a face value of $54.7 billion, or about 3 cents on the dollar.”

Minnesota Attorney General Lori Swanson stated in the complaint that Midland workers signed up to 400 affidavits a day without reading them. Business affidavits are often the only evidence used against an individual in a collection case. Earlier this year the federal government issued sanctions against 14 banking organizations for robo-signing documents used in the foreclosure process, citing a serious “pattern of misconduct and negligence.” These unreliable and often false affidavits can pervert the judicial process, in some cases causing judgments for money not owed or a foreclosure by a bank that does not hold the mortgage note.

If you are facing a lawsuit or foreclosure, speak to an experienced bankruptcy attorney and discuss your options. In some cases you may have a non-bankruptcy legal defense or the opportunity to resolve the debt without further litigation. Additionally, the bankruptcy process may be able to save your home or discharge a large collection account. Do not be the victim of the fraudulent practices of banks and collection agencies. Learn your legal rights and protect your property, income, and peace of mind!

 

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