Minnesota Attorney General Lori Swanson today announced a Consent Judgment with Midland Funding, LLC, one of the country’s largest debt buyers and which has offices in St. Cloud, to settle a lawsuit she filed against the company last year for filing unreliable “robo-signed” affidavits in collections lawsuits and sometimes targeting the wrong people for payment of old bills that it purchased from credit card companies and banks for pennies on the dollar.

“This lawsuit was about respect for the legal system. In its rush to quickly collect old debts that it purchased for just a few pennies on the dollar, the company ignored legal requirements designed to protect the rights of an individual in court,” said Attorney General Swanson.

Midland buys old, charged-off debt from banks and credit card companies, including Bank of America, JP Morgan Chase, Citibank, Wells Fargo, from phone companies like Verizon Wireless, and from other debt buyers. Midland is one of the largest debt buyers in the country.


This lawsuit was the first governmental action in the country against a debt buyer for filing “robo-signed” affidavits to support the debt buyer’s claims in individual lawsuits. The lawsuit alleged that Midland aggressively filed thousands of collections lawsuits against individuals in Minnesota courts, often supported by unreliable “robo-signed” affidavits generated at Midland’s St. Cloud, Minnesota offices. Several Midland employees admitted in sworn testimony to signing up to 400 affidavits per day, either without reading them, without personal knowledge of their contents, and/or without verifying the accuracy of the information contained in them. Examples of affidavits filed in court to support individual Midland collection lawsuits include:

  • Robo-signed affidavits in which Midland employees signed hundreds of affidavits a day and falsely attested to have personal knowledge of their content, including the validity of the debt, the amount of the debt, the company’s ownership of the debt, and/or the documents giving rise to the debt, even though the employee did not have this knowledge and did not read the affidavit he or she signed.
  • Affidavits in which a notary—a quasi-judicial officer—falsely states that she witnessed a Midland employee or agent sign an affidavit under oath and penalties of perjury, even though the affidavit was never signed by the Midland employee or agent. These affidavits were then used to prove to the court certain facts, such as the amount owed by the consumer, that the consumer did not answer the lawsuit, or that an individual was served with legal papers. Click here for examples.
  • Affidavits filed to support that Midland owned the debt, or had a contractual obligation with an individual, even though the underlying documentation filed with the affidavit did not support Midland’s ownership or contract.


The Consent Judgment requires Midland to do the following:

Before it files a lawsuit:

  • So that people have the opportunity to dispute illegitimate requests for payment, Midland must provide individuals with validation of the debt, including: a) the name of the original creditor; b) the last four digits of the original account number; c) the current owner of the debt and an explanation that the debt was sold; d) the amount owed to the original creditor at the time of charge-off; e) the amount owed to the current owner, including a breakdown of the charge off amount and any post-charge off fees, interest, and other charges; f) for debt that is beyond the statute of limitations, a statement that Midland will not sue on the debt.
  • To address the problem that people who don’t owe the money are improperly subjected to collection requests, Midland must verify the identity and address of an individual claimed to owe money at the outset, before any collection effort is made.
  • If an individual indicates that he or she doesn’t owe the money, Midland must investigate the matter and, if it cannot substantiate the debt, close the account, take steps to correct any adverse credit reporting, and not later resell the debt.

In connection with lawsuits:

  • To address the use of “robo-signed” testimony, Midland must not file affidavits w/ the court unless the person has: a) read and understood them, b) confirmed the authenticity of any documents filed w/ the affidavit, c) only based the affidavit on the signer’s personal knowledge, and d) signed the affidavit in the presence of a notary who acknowledges the affiant’s signature in accordance with law.
  • To address problems created by its attempts to collect on very old, so-called “zombie debt,” Midland must implement standards to ensure it does not sue people on debt that is beyond the applicable statute of limitations.
  • To address problems with people not getting fair notice of lawsuits filed against them, Midland must change the way it serves lawsuits to ensure that people receive actual notice of the lawsuits and are afforded a meaningful opportunity to respond to them.
  • Midland must implement procedures to ensure it does not sue people on debt that it does not own.
  • To address miscommunications where people who are sued by Midland believe that they have sufficiently responded to a lawsuit, if a person who is sued calls or writes Midland to dispute the debt or request validation of it, Midland may not pursue a default judgment without giving the person written notice that their response does not constitute a legal answer and waiting 30 days so the person can seek legal counsel or otherwise respond to the lawsuit.
  • To address the problem that people who are sued by Midland do not understand the nature of the lawsuit and in some cases may believe it to be a scam (since they have never done business with Midland), Midland must include added specificity about the facts supporting its claims in its lawsuits so that individuals can meaningfully respond to the suits against them. For example, Midland must include in its lawsuits: a) the name of the original creditor and the identity of all subsequent purchasers; b) the last four digits of the original account number; c) the date on which the debt was charged off by the original creditor; d) the amount owed to the original creditor at the time of charge-off; e) the amount of any post-charge off fees or interest; f) the current owner of the account.
  • In order to give individuals additional opportunity to appear and defend themselves in lawsuits, Midland must, at least 10 days before it pursues a default judgment against an individual, send a copy of the judgment request to the individual. The Consent Judgment also requires Midland to provide certain additional validation to the individual if he or she denies liability for a debt and requires Midland to disclose to the Court any response from the individual.

Under the Consent Judgment, Midland will also:

  • Resolve outstanding and future consumer complaints made to the Attorney General’s Office.
  • Pay $500,000 to the State of Minnesota.

The Consent Judgment was approved by Hennepin County District Court Judge Denise Reilly.

Since 2008, Midland has filed over 15,000 lawsuits against individuals in Minnesota courts. Along with its parent corporation (the publicly traded Encore Capital Group, Inc.), Midland has paid more than $2.1 billion to purchase about 40 million accounts with a face value of about $66.4 billion, or an average of three cents on the dollar to acquire the debt.

Consumers may report complaints against debt buyers to the Minnesota Attorney General’s Office by calling (651) 296-3353 or (800) 657-83787. Consumers may also download a Complaint Form from byclicking here and mail the completed form to the Attorney General’s Office at: 1400 Bremer Tower, 445 Minnesota Street, St. Paul, MN 55101-2131.The Attorney General’s Office has a publication entitled “Debt Buyers,” which has more information for people facing problems with a debt buyer.