New York City Debt Collection Defense Attorney

FTC Files Amicus Brief Objecting to Midland Settlement

We recently wrote in this space about a controversial proposed class action settlement in a federal case pending in Ohio against debt buyer Encore Capital Group and its collections unit Midland Funding. The attorneys general of 38 eight states have already weighed in, strongly objecting to the proposed settlement, and now the Federal Trade Commission (“FTC”) has filed an amicus brief in which it also objects to the settlement.

The FTC is one of several government agencies tasked with oversight of the debt buying industry. As summarized on the FTC's website, the agency’s concern is that “if the court accepts the settlement, class members will have to give up too much in exchange for too little.” Under the terms of the settlement, each class member would get approximately $10. In exchange, class members would give up their rights under federal and state law to challenge Midland’s use of affidavits in debt collection lawsuits, possibly including the right to challenge default judgments already obtained by Midland.

The FTC is also concerned that nothing in the settlement limits Midland’s use of the personal information Midland will obtain from consumers in connection with the proposed settlement.

A fairness hearing is set for July 11 in the U.S. District Court for the Northern District of Ohio to consider the proposed settlement. The case is captioned Vassalle v. Midland Funding.

-Sheril Stanford