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Debt Buyer Fined after Losing Thousands of Court Cases

March 20, 2015

According to a recent article in The New York Times, debt buyer Encore Capital Group has reached a settlement with the state of New York over a a number of faulty lawsuits against New York residents. Encore filed thousands of lawsuits against borrowers whom, according to the organization, failed to sufficiently pay their debt.

New York Attorney General Eric T. Schneiderman reports that, as a result of the settlement, Encore will be required to pay about $675,000 in fines for the flawed lawsuits against consumers. As Schneiderman explains, many of the more than 4,500 lawsuits that Encore was involved in were due to a lack of accurate information regarding, among other factors, the amount of debt owed.

The Encore case is a microcosm of the myriad of problems surrounding the process of debt buying. As frequently discussed on our blog, debt is often purchased with outdated or otherwise incorrect information. When the debt changes hands, buyers either attempt to collect debt that was paid off, or an amount different from what was present on the documentation.

In many other cases, Encore attempted to collect debt from consumers despite it being beyond the statute of limitations. New York laws stipulate that debt buyers have between three and seven years, depending on a number of factors involved with the debt.

As with many debt collection cases, Encore has agreed to examine and revise its debt collection protocol, especially with regards to the accuracy of the debt it attempts to collect.