Company responds to Texas AG's lawsuit

Bryan Cohen Jul. 11, 2011, 12:15pm


SAN DIEGO (Legal Newsline) - The San Diego-based Encore Capital Group, a consumer debt buying and recovery company, announced on Friday that it disagrees with the allegations brought against it in a lawsuit by Texas Attorney General Greg Abbott.

Abbott alleged that Encore violated Texas debt collection laws, including attempting to collect debts based on incomplete or inaccurate account information and employing unlawful and deceptive debt collection tactics.

The Texas complaint largely restates allegations in a 2008 lawsuit called Brent, Encore and its wholly owned subsidiaries, Midland Funding LLC and Midland Credit Management allege. In that lawsuit, it was alleged that affidavits filed in debt collection lawsuits were defective because the person who signed the affidavits lacked personal knowledge. Contrary to Abbott's suggestion, Encore contends, the alleged defects in the affidavits did not result in judgments against people who did not owe the debts.

"(There was) no evidence that the amount of debt, the fact that it is unpaid, or other vital account information, is false," the judge in the Brent case ruled. "(Midland) could easily prepare a form affidavit that achieved the same goals without being misleading by reflecting the truth, plain and simple...they could base it on the accuracy of the records kept and the accuracy of the data," the court also stated during the Brent case.

The company adjusted its affidavit process in 2009 to comply with the court's direction and Encore is confident that its current practices are legally sound. A fairness hearing regarding the 2008 Brent lawsuit settlement is scheduled for Monday.

Encore says it is certain of the validity regarding the underlying debts at issue and maintains that the judge will support the company's position and formally approve the settlement. Encore says it intends to continue to cooperate with Abbott's office in seeking to resolve the lawsuit.

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