Friday, September 25, 2020

Latest CFPB News From the National Accociation Of Credit Services Organization (NACSO)



A coalition of 21 consumer, faith, and advocacy groups sent the below letter Thursday to Consumer Financial Protection Bureau Director Kathy Kraninger urging her to revoke the permission that the Bureau granted the credit reporting industry to violate the 30-day deadline imposed by the Fair Credit Reporting Act (FCRA) for investigating disputes. In an April 1, 2020 guidance, the CFPB had permitted credit and consumer reporting agencies (CRAs) — and the banks, lenders and debt collectors that report information to the CRAs — to exceed the 30 days due to “reductions in staff, difficulty intaking disputes, or lack of access to necessary information.”

The groups urged Director Kraninger to rescind the permission to exceed the 30-day deadline in part because of a dramatic increase in complaints to the CFPB from consumers alleging delays in resolving their disputes. The letter partially states:

“From the time period of April 1 to September 23, 2020, there were 6,864 complaints in the credit reporting category that are in the subcategory “Was not notified of investigation status or results;” there were 6,262 complaints in the subcategory “Investigation took more than 30 days.” Thus, consumers have lodged over 13,000 complaints just in the past six months alleging that their disputes have not been addressed within the FCRA deadline, if addressed at all. In comparison, there were only 2,000 complaints in both of these two subcategories cumulatively for the same time period in 2019. This means there has been a 550% increase–likely as a result of the CFPB guidance.”


Here is the CFPB letter:

 September 24, 2020 

Kathleen Kraninger, Director Consumer Financial Protection Bureau 1700 G Street, N.W. Washington, DC 20552 

Re: Rescinding language in April 1, 2020 CFPB guidance allowing CRAs and furnishers to exceed FCRA deadlines for disputes 

Dear Director Kraninger: 

The undersigned organizations call upon the Consumer Financial Protection Bureau to rescind a portion of its April 1, 2020 guidance entitled “Statement on Supervisory and Enforcement Practices Regarding the Fair Credit Reporting Act and Regulation V in Light of the CARES Act.” We urge you to rescind that portion of the April 1 guidance permitting consumer reporting agencies (CRAs) and furnishers to exceed the statutory deadlines imposed by the Fair Credit Reporting Act (FCRA) for investigating disputes. 

Allowing CRAs and furnishers to violate the statutorily-imposed deadlines imposed by the FCRA is having a significant impact on American consumers. A search of the CFPB complaint database reveals that there has been a dramatic increase in complaints from consumers regarding delays in the processing of their disputes. From the time period of April 1 to September 23, 2020, there were 6,864 complaints in the credit reporting category that are in the subcategory "Was not notified of investigation status or results;" there were 6,262 complaints in the subcategory "Investigation took more than 30 days." Thus, consumers have lodged over 13,000 complaints just in the past six months alleging that their disputes have not been addressed within the FCRA deadline, if addressed at all. In comparison, there were only 2,000 complaints in both of these two subcategories cumulatively for the same time period in 2019. This means there has been a 550% increase--likely as a result of the CFPB guidance. 

Furthermore, it has been nearly six months since the Bureau issued its April 1 guidance based on the disruption from the COVID-19 pandemic. There should no longer be a pressing need for relaxing statutorily mandated deadlines due to “reductions in staff, difficulty intaking disputes, or lack of access to necessary information.” These issues should have been addressed during the last six months. Most states have partially or completely lifted shutdown orders that prevented employees from going to their offices. 

Even if the CRAs and furnishers understandably want to minimize the number of employees in a location, thousands of large and small companies have shifted in the last six months to operating with most of their workforce working from home. If there are privacy and data security issues posed by working from home, multimillion-dollar transnational corporations should have been able to figure this out during the last 6 months. Furthermore, given that the nationwide CRAs often process disputes remotely in foreign countries such as India and Chile, they are already accustomed to sending information overseas and hopefully have data security safeguards in place. To the extent there are furnishers that do not have the data security safeguards needed to investigate disputes using employees at home, these same furnishers should not be actually furnishing information to the CRAs either absent those safeguards. 

These delays or even failure to process disputes are causing real and significant difficulties to American consumers. 

For example, one consumer complains: “It has been over 60 days ago since I've sent letters to this bureau and they are disregarding a regular consumer disputes. I'm stressed and have been sending letters before this and still no response. I am trying to get a house and can not move forward without supplying these results.” 

Consumer complaint to CFPB ID 3811090, Aug 24, 2020 At a minimum, the CFPB should limit the extra time provided to CRAs and furnishers to 15 days, or at most 30 days beyond the FCRA-mandated 30-day deadline for investigating disputes. 

Fifteen to 30 extra days should be more than enough, given that they have had six months to adjust to working in the COVID-19 environment, and the amount of harm to consumers. 

For questions about this letter, please contact Chi Chi Wu at or 617-226-0326. 


National Consumer Law Center (on behalf of its low-income clients) Americans for Financial Reform Education Fund Center for Digital Democracy Consumer Action Consumer Federation of America Consumer Reports Delaware Community Reinvestment Action Council, Inc. Demos Missouri Faith Voices Montana Organizing Project National Association of Consumer Advocates New Georgia Project New Jersey Citizen Action Public Good Law Center Tennessee Citizen Action Texas Appleseed Tzedek DC U.S. PIRG Virginia Organizing VOICE - OKC Woodstock Institute 

Tuesday, September 3, 2019

Instructions to File for Settlement from the Equifax Data Breach

This was an email that I received recently. As mentioned in all of the CRA Facebook posts,  I ONLY recommend taking the credit monitoring option. You will get 10 years total of credit monitoring from Equifax, which is a much better deal than $125.00. You wont even get $125 actually. If all 147 million people entitled to a settlement request the cash option, everyone would only get 21 cents a piece. Great. So, go ahead and enroll in 10 years of credit monitoring and hope that Equifax will get their stuff straight moving forward.

** Also enroll your family members before January 2020. That is 3 months from now. Get moving!


If Your Personal Information Was Impacted in the 2017 Equifax Data Breach, You May Be Eligible for Benefits from a Class Action Settlement

Un aviso de este acuerdo también está disponible en
In September of 2017, Equifax announced it experienced a data breach, which impacted the personal information of approximately 147 million people. Equifax has reached a proposed settlement to resolve class action lawsuits brought by consumers alleging Equifax failed to adequately protect their personal information. Equifax denies any wrongdoing, and no judgment or finding of wrongdoing has been made.

If your personal information was impacted in the Equifax data breach, you may be eligible for benefits from the settlement after it becomes final. Under the proposed settlement, Equifax will: (1) pay $380.5 million into a fund to pay benefits to consumers, court-approved fees and costs of class counsel and service awards to the named class representatives, and other expenses; (2) implement and maintain certain data security enhancements; (3) if necessary, pay up to $125 million more to reimburse consumers for out-of-pocket losses resulting from the data breach; and (4) provide certain other relief.
Are You Eligible: You are a class member and eligible for settlement benefits if you are a U.S. consumer whose personal information was impacted by the Equifax data breach. If you are unsure of whether you are a class member, visit and click the "Find Out if Your Information Was Impacted" button or call 1-833-759-2982.

Benefits: If you are a class member, you are eligible for one or more of the following benefits:
1. Free Credit Monitoring or Cash Payment. You can get free credit monitoring services. Or, if you already have credit monitoring services, you can request a cash payment of up to $125.
The free credit monitoring includes at least four years of three-bureau credit monitoring, offered through Experian. You can also get up to six more years of free one-bureau credit monitoring through Equifax.
If you already have credit monitoring services that will continue for at least 6 more months, you may be eligible for a cash payment of up to $125. The amount you receive may be substantially less than $125, depending on the number of claims that are filed.
2. Other Cash Payments. You may also be eligible for the following cash payments up to $20,000 for:
the time you spent remedying fraud, identity theft, or other misuse of your personal information caused by the data breach, or purchasing credit monitoring or freezing credit reports, up to 20 total hours at $25 per hour.
out-of-pocket losses resulting from the data breach.
up to 25% of the cost of Equifax credit or identity monitoring products you paid for in the year before the data breach announcement.
                      *** Good luck getting ANY part of $20,000. If you are successful in any way, please leave a comment on this blog. Thanks. Good luck!
3. Free Identity Restoration Services: You are eligible for at least 7 years of free assisted identity restoration services to help you remedy the effects of identity theft and fraud.
Important Information Regarding the Proportional Reduction of Benefits. If you request or have requested a cash benefit, the amount you receive may be significantly reduced depending on how many valid claims are ultimately submitted by other class members for this relief. Based on the number of potentially-valid claims that have been submitted to date, payments for time spent and alternative compensation of up to $125 likely will be substantially lowered and will be distributed on a proportional basis if the settlement becomes final. Depending on the number of additional valid claims that are filed, the amount you receive for these benefits may be a small percentage of your initial claim.
How to Get Benefits:

To get free credit monitoring or cash payments, or both, you must submit a claim:
Online at, or
By mail.
You must submit a claim by January 22, 2020. Certain claims may require supporting documents. If you have already filed a claim, there is no need to do so again. 
If there is still money in the fund after payment of valid claims submitted during the initial claims period that ends on January 22, 2020, there will be an extended claims period lasting for four years. In the extended claims period, you may make certain claims for out-of-pocket losses incurred in the future, including time and money spent trying to address identity theft or fraud related to the data breach.

You don’t need to file a claim to get free identity restoration services.

None of these benefits will be distributed or available until the settlement is finally approved by the Court. If you make a claim for cash compensation, the amount of money you receive may be significantly less than the claim you submit depending on the number and amount of claims that are submitted.
Understanding Your Options:

If you want the Court to exclude you from the settlement class, you must write to the Settlement Administrator by November 19, 2019. List the name of this proceeding (In re: Equifax Inc. Customer Data Security Breach Litigation, Case No. 1:17-md-2800-TWT), your full name, your current address, and the words “Request for Exclusion” at the top of the document. You must sign this request and mail it to Equifax Data Breach Class Action Settlement Administrator, Attn: Exclusion, c/o JND Legal Administration, P.O. Box 91318, Seattle, WA 98111.

To object to the settlement, you must file an objection with the Court by November 19, 2019. For detailed instructions about the process of objecting, visit

You must file a claim if you want to receive free credit monitoring or cash benefits under this settlement. If you do nothing, you won’t receive a cash payment or credit monitoring services, won’t be able to sue Equifax for the claims being resolved in the settlement, and will be legally bound by all orders of the Court.
The Court will hold a hearing on December 19, 2019, to consider any objections, and decide whether to approve the settlement, award attorneys’ fees and expenses, and grant service awards to the named class representatives. You may enter an appearance through an attorney, but do not have to. The Court has appointed lawyers to represent you and the class, but you can hire another lawyer at your own expense.

This is only a summary of the settlement. For more information, visit, or call (toll free) 1-833-759-2982.

This is a Court authorized notice, not a lawyer advertisement
Email Disclaimer
The Equifax Data Breach Settlement Administrator will never ask you to provide sensitive information, such as, your Social Security Number or Tax ID, Bank Account Number, Credit Card Number, Driver’s License or Passport Number, or Password, etc. via email. All email communications sent by the Equifax Data Breach Settlement Administrator OR on behalf of the settlement administrator will originate from, the official email address of the settlement. If you receive an email which you suspect to be fraudulent, do not reply or do anything it instructs you to do, but immediately forward it to

NEXT POST: Active Duty Military are Eligible for FREE Credit Monitoring


Credit Restoration Associates participates in Ground Breaking Scientific Research Study Linking "Credit Worthiness" to Factors that Contribute to Suicide. Read all details at link below: 

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Tuesday, June 25, 2019

Active Duty Military are Now Eligible for Free Credit Monitoring

The Federal Trade Commission has finalized the rule implementing a 2018 law that requires the nationwide consumer reporting agencies (CRAs) to provide free electronic credit monitoring services for active duty military consumers.
The Free Electronic Credit Monitoring for Active Duty Military Rule, which will be published in the Federal Register shortly, implements legislation included in the 2018 Economic Growth, Regulatory Relief, and Consumer Protection Act, which amended the Fair Credit Reporting Act (FCRA) by requiring CRAs to notify active duty military consumers about any “material” additions or modifications to their credit files.
The FTC received 19 comments on its proposed Rule, released in November, which defined key terms such as “electronic credit monitoring service” and “material additions or modifications” to the file of a consumer. It also included proposed requirements for how CRAs can verify that an individual is an active duty military consumer, as well as restrictions on the use of personal information and on communications surrounding enrollment in the free service.
The final Rule defines “active duty military consumer” as a consumer in military service who meets the FCRA’s definition of “active duty military consumer,” which requires that the consumer be assigned to service away from their usual duty station, or be a member of the National Guard. While commenters recommended eliminating the requirement that a military consumer be assigned to service away from their usual duty station, the statute limits the Commission’s discretion on this topic. To the extent that Congress intended to provide free credit monitoring more broadly, the Commission calls on Congress to address this issue through additional legislation.
The final Rule also clarifies that National Guard members do not need to be deployed away from their usual duty stations to be eligible for the free credit monitoring. Because the statute does not expressly apply the duty station requirement to National Guard members, the Commission has interpreted the Act as providing the benefit of free credit monitoring to members of the National Guard regardless of whether they are assigned away from their usual duty station.
The final Rule also addresses concerns that active duty military consumers might have to pay to access their credit files after being alerted to an addition or change. The final Rule requires that when a CRA notifies an active duty military consumer about a material change to their credit file, the CRA must also provide that consumer with free access to that file.
The final Rule extends the amount of time the CRAs have to notify an active duty military consumer of a material change from 24 hours to 48 hours. In addition, the final Rule makes certain changes to the definition of “material additions or modifications.”
The final Rule retains restrictions on secondary uses and disclosures of information collected from an active duty military consumer requesting the credit monitoring service. It also bans marketing during the enrollment process until after an active duty military consumer has been enrolled in the free credit monitoring service. The final Rule also prohibits the CRAs from requiring active duty military consumers to agree to terms or conditions, unless such terms or conditions are necessary to comply with applicable legal requirements.
The Rule will go into effect three months after publication in the Federal Register. The Commission, however, will allow the CRAs to comply with certain portions of the Rule by offering their existing commercial credit monitoring services for free to active duty military consumers, for a period of up to one year from the effective date.
The Commission vote to publish the final Rule in the Federal Register was 5-0.
The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook, follow us on Twitter, read our blogs, and subscribe to press releases for the latest FTC news and resources.
Credit Restoration Associates participates in Ground Breaking Scientific Research Study Linking "Credit Worthiness" to Factors that Contribute to Suicide. Read all details here:

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Wednesday, March 27, 2019

CONCLUSIVELY - 18 Month Research Study Linking the Impact of Credit Worthiness to the Suicide Rate..

Research Study linking the Impact of Credit Worthiness to Financial Well Being
The entire Credit Restoration Associates (CRA), team has been extremely honored to have partnered with Doctor Cathie Hughes, PHD, in her Life Changing research study. I still can't believe that it has been 18 months!

This is an absolute, exclusive and truly a revolutionary breakthrough. I look forward to moving this research to the lext level. We are currently obtaining funding to expand the regional study. Subsrcibe to this blog to recieve updates.

Read the complete text of Dr. Hughes's Expanded Abstract of the study in the link below:

Read down to page 10 of Dr Hughes’s expanded abstract paper. 

It starts to address the “Credit Restoration Intervention” as the direct remedy to remove “financial stressors” that will directly have an impact in the reduction of suicides. .

The ENTIRE credit repair community needs to come together and complete this research. The entire 288 page body of the research study will only be available to the Master Mind Group that should be put together before the end of April 2019.

The entire communication on all details will be done through NACSO's Facebook group. To be a legitimate credit repair organization, you need to be a member of NACSO. It is time for you to "bite the bullet" and join NACSO.

Joining is the best thing that you can do if you are serious in the long-term growth of your credit repair company. Please contact me or your NACSO representative to become a member of NACSO, and help participate in this research study. We are collectively going to change the world!!

Next Post:
How To Read an Automotive Equifax Beacon 5.0 Credit Report

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Thursday, February 21, 2019

How To Read an Automotive Credit Report

CRA blog readers,

It has been my pleasure for many years publishing and writing articles for this blog. I found this article interesting because it was originally published in F&I Magazine, an automotive industry trade magazine.

F&I stands for Finance & Insurance. An F&I Manager at a dealership is also called the Business Manager. He or she is the individual who submits your application to banks and finance sources to get you approved for financing. This individual will also be the one who you sign paperwork with before taking delivery of your new (or new to you) vehicle.

The interesting thing about this article is that it is meant to be read by the F&I manager - who is supposed to be the credit expert in the dealership. At least that was how it was in the car business 12 years ago as I remember it. Anyway, here is some good information:

Just the Facts
A customer’s credit report and credit score are a reflection of data reported by creditors to the three major credit bureaus: Equifax, Experian, and Trans- Union. It can predict how likely it is that a consumer will pay back his or her auto loan, which can help determine the ap­propriate interest rate and whether your captive finance company will buy it. The data is organized in such a way as to iden­tify the consumer and provide a complete picture of their credit acquisition and payment history.
Some dealerships may rely on just one bureau for credit reports. Oth­ers focus only on the score. But scores can vary across reports, and sometimes there is an imbalance. When the scores vary wildly across reports, that most of­ten means at least one of them is lacking key information.
Case in point: Not all lenders report to every credit bureau. Should a con­sumer be turned down because of a lack of, different, or negative information on a given report, the best financing deal is not achieved and lost profits ensue. If you send them home, they are probably not coming back.
 My Auto
Credit Report Breakdown
You need a general understanding of what is in a credit report to evaluate each customer’s access to credit in a timely manner. Reports produced by each bu­reau might differ in terms of layout, but each will contain the following pieces of information:
• Subscriber-provided input and in­formation: This is a record of actual con­sumer information that has been entered to locate the file.
• Consumer demographic informa­tion: This section helps verify consumer identity by providing certain information from data furnishers. This may include the consumer’s name, current and previ­ous addresses, Social Security number, date of birth, phone number, and em­ployment history.
• Special messages: This section shows any special credit file conditions and helps with compliance requirements. It highlights differences in surname, ad­dress, or SSN, includes notification of ad­dress discrepancy — which is a require­ment under the Fair Credit Reporting Act — and provides information which may help you comply with the USA Patri­ot Act. High-risk fraud alerts may appear if an address or Social Security number was used in previous suspected fraudu­lent activities, and names can be screened against the U.S. Treasury Department’s OFAC database.
• Model profile: This section is only in­cluded when you subscribe to and receive certain scores or models, such as a FICO score or a VantageScore. Each has its own algorithm and each has multiple versions. Know which version is being used should the consumer have questions.
• Credit summary: An optional com­ponent, it provides a snapshot of the con­sumer’s credit report for either the total file history, or just the last 12 months of activity, illustrating the number of nega­tive accounts from any of the assigned creditors. It also provides a total of dif­ferent trades from revolving credit, in­stallment loan accounts, and number of inquiries.
• Auto summary: This section dis­plays activity relevant to vehicles the consumer has financed, features five of most recent auto trades (both open and closed), an estimate of APR for each auto loan, and total revolving credit calcula­tion. You will also find a summary of payment, balance, months remaining, and delinquencies on auto loans, the highest amount ever owed on an account, the maximum credit approved by the grantor, the balance owed as of the date verified, any past due amounts, the sub­scriber-reported monthly payment, and the percent of credit available for each account.
• Collections: Here you will find any accounts placed with a debt collection firm along with corresponding dates.
• Trades: This section covers buying and payment activities. It shows a number of codes for type of business and the col­lateral. It shows the highest amount ever owed by the consumer and the current balance owed. “Terms” show payments, frequency, and any past due amounts. Should delinquency occur, it will list the date. “Payment history” shows up to 24 months of credit account statuses, including any past due and missed pay­ments, which stay on most reports for about seven years. Trade information also includes the abbreviated name of the credit grantor or data furnisher with whom a consumer has an account.
• Credit inquiries: This is a list of all the banks, credit unions, auto dealers, mortgage companies, and other would-be creditors that have pulled the consum­er’s credit file over the past 24 months.
• Consumer statement: A statement to protect consumers against fraud may be included.
Pertinent Tips
Dealers should be working with credit bureaus to help consumers and provide a seamless experience, and this starts with dealer education. Fraud prevention should also be addressed with solutions that F&I managers can incorporate into their workflows, such as better manag­ing the “Red Flag” alerts that will come up when a potential higher risk of fraud is presented. There can be added stipula­tions in the consumer verification pro­cess, such as income verification and ad­dress mismatch.
Overall, a person’s credit scores can vary by as much as 50 points between different bureaus due to the different in­formation reported to each bureau and the data used to calculate each bureau’s scores. For example, two of the three bureaus may place a consumer in the “prime” tier while the third may have that same consumer several tiers down, leav­ing them with less attractive financing offers. Factors such as old data or report­ing errors could adversely impact a credit score at one bureau compared to another.
Armed with a better understanding of the consumer credit report, F&I man­agers can get the most out of the lending process for their buyers, deepen their re­lationships by building their credibility with accurate information and meet auto lending compliance requirements.
Read Original Article by Brian Landau in F&I Magazine HERE

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Thursday, January 17, 2019

Credit Repair Promotion 2019 for Liberty Tax Franchisees - NOW is the time

Hello Liberty Tax Franchisees and Store Managers,

Today is the 17th of January, and if you have not told your preparers to refer clients to us for credit repair, call the CRA office ASAP to schedule us to do a training session for your team. 804-823-9601. Plan on a day when everyone can be present to participate in the training. 

You are about to start getting very busy and you are Going to have an excellent 2019 tax season!!  

And as you know, referring clients to us for credit repair is a VERY lucrative "additional income" for you. View the 2019 promotion video by clicking below:  vvvvvvvvvvvvv

 Liberty Tax 2019 Credit Repair Affiliate Promotion

See our updated "Zee Net" page on the Liberty Tax Corporate resources site for talking points for credit repair services in your stores. "Financing", then "Outside Financing", then "Credit Restoration Associates" for all program details and guidelines.

You will make $50.00 per referral, X 100's of referrals this tax season!!! It will help you to make payroll.. utilities.. Liberty franchise fees.. whatever you need. 

Call Credit Restoration Associates for more information: 804-823-9601 x101

Are you interested in opening a satelite credit repair office in your Liberty Tax store(s)? Are you intersted in investing in a credit repair business opportunity? Visit our credit repair franchise page: for additional information and special offers to get started.

Credit Repair Franchise Business Opportunity Videos below:
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 Credit Repair Franchise Business Opportunity

 Shawn Womack Franchise Director Credit Repair Franchise Program and Business Opportunity

NOW is the time to invest in the future of your company. 

Robert Linkonis, our company President, and his company, Credit Restoration Associates, has physically attended each of the last 7 (seven) Liberty Tax conventions in Virginia Beach VA. We have had a full "Vendor Booth" in the exhibit hall of each convention  

You have most likely met Robert if you attended any of the Liberty Tax Conventions, or participated in his seminars on personal credit or business credit in the last seven years.

From Robert:
"I cannot remember exactly how many of you approached us at our vendor booth at the last 7 (seven) Liberty Tax Conventions in Chesapeake, Virginia Beach asking to buy into our franchise model. I have met thousands of you in the "breakout" sessions after each of my presentations to talk about fixing personal credit and building business credit...


Now is the time!

Call NOW to get started with the referral program (discounts for your family and your employees!) and Call NOW to schedule a conversation about becoming a full partner. (804) 823-9601.

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Wednesday, December 5, 2018

Here’s What You Need to Know About Midland Credit Management and Midland Funding

Midland Funding is a company that buys old credit card debts at a steep discount, often without proper documentation. The company tries to collect by hiring collection agencies; if that doesn’t work, Midland will hire a lawyer to file a collection lawsuit.
If you go past due on a credit card debt, it’s going to be sold to another company. That’s how credit card companies make their money – by selling old debts that they can’t collect on their own.
The companies who buy old debts usually pay far less than face value for the account, so your $5,000 debt may be sold for as little as $500 depending on the exact nature of the account. Once the deal is done, the credit card company is out of the picture and only the debt buyer has the legal right to receive payment.
One of the major players in the debt buyer arena is Midland Funding, a unit of Encore Capital Group. Encore Capital, based in San Diego, is the largest debt buyer in the nation, buying enormous portfolios of charged-off debts each year in the hopes that it will be able to collect.
Midland Funding LLC is one of the nation’s biggest buyers of unpaid debt. Midland Funding LLC purchases accounts with an unpaid balance where consumers have gone at least 180 days without making a payment, or paid less than the minimum monthly payment.
Midland Funding LLC works with its affiliate, Midland Credit Management (MCM), to service accounts.
So there you have it – Midland Funding LLC buys the debts and hires Midland Credit Management to try to collect from you.

Midland Buys Debts, But What is it REALLY Buying?

The problem isn’t that debts are sold to other companies, or that the new company hires someone else to collect from you. If the original creditor can’t get you to pay the debt, it makes sense that the lender would want to sell the account in an effort to minimize its losses. The new buyer understandably doesn’t want to pay full price for the account, which is why these debts are sold at such steep discounts.
When a debt gets sold, there are certain documents that should be transferred from the seller to the buyer. Such items include:
  • The original agreement, including the terms and conditions under which the original lender agreed to extend credit;
  • copies of statements showing how the borrower incurred the debt, including the dates of transactions;
  • A complete accounting that shows how interest and other charges were calculated, as well as how payments were apportioned;
  • Proof that the buyer actually purchased this specific account; and
  • The terms and conditions of the sale of the account.
Midland Funding, however, buys billions of dollars worth of debt each year. To cut its costs, Midland wants to pay as little as possible for each account. The credit card companies, however, want to get paid as much as possible so that they take less of a loss on their unpaid accounts.
To compromise, Midland Funding (as well as just about any other debt buyer out there) buys nothing more than an electronic file of names, addresses, and amounts due. The company doesn’t ordinarily receive copies of agreements, statements, or anything else that would prove the amount or ownership of the debt.
The agreements covering these transactions allow Midland Funding to get more information, but it’s going to cost them more money – as much as $50 per account. That may not sound like much of an investment, but when you consider that Midland Funding is buying tens of thousands of accounts you can easily see how it can add up and cut into their bottom line.

The Midland Funding Business Model:

Midland Credit Management will usually try to collect on a debt once Midland Funding buys the account, hoping that the consumer will voluntarily make a payment. Some people will pay the debt, others won’t.
If you don’t pay the debt when Midland Credit Management comes calling, then Midland Funding will take back the account and send it to a law firm. In California Midland’s primary outside law firm is Hunt & Henriques, though sometimes they keep the account in-house and use one of their own attorneys.
That happens a lot – in fact, during November 2014 alone Midland Funding and Midland Credit Management filed 193 collection cases in Los Angeles Superior Court alone.
In the vast majority of those cases (well over 90% of the time, in fact), Midland Funding gets a judgment for the entire balance they claim to be due.

Why Midland Funding Get's Judgments So Often:

Most of the time, when someone is sued by Midland or another debt buyer, they fail to defend the case or show up in court.

With no opposition to the lawsuit, the judge grants a judgment in Midland’s favor. Once that judgment is issued, Midland can collect through wage garnishment, bank account levy, and other tactics.
That judgment, in California at least, can be renewed indefinitely. And once the judgment is issued, it’s difficult to get it lifted.

States Have Notices Midland's Shoddy Practices.

I’m not the only one who’s noticed how shoddy Midland is when it comes to filing credit card lawsuits with little or no proof.
In January 2015, New York State Attorney General Eric Schneiderman sued Encore (Midland’s parent company) over shoddy practices and forced Encore to pay a $675,000 penalty and vacate more than 4,500 court judgments against borrowers.
In 2012 the West Virginia Attorney General sued Encore “for using false affidavits when obtaining default judgments against West Virginia consumers and for failing to include information required by law when suing a consumer in magistrate or circuit court for an alleged debt.”
In 2011, the Minnesota Attorney General launched an inquiry into an Ohio class action against Encore for debt collection abuses after filing a lawsuit against Encore.

If You're Contacted or Sued By Midland...

It’s not hard to see why it makes sense to defend any credit card lawsuit that’s brought against you by Midland Funding, Midland Credit Management, or Encore. The company has a long history of playing fast and loose with the debt collection process, and there’s no reason to expect that your case would be any different.
Defending the lawsuit gives you the chance to force Midland to prove up the case, including answering the following questions:
  • are you responsible for payment of the account?
  • does Midland rightfully own the debt they claim they own?
  • is the amount they claim to be due actually accurate?
  • has the lawsuit been filed within the appropriate statute of limitations for collection of a debt?
It’s about making sure that you pay the proper people the proper amount of money, and not one dime more.

About the Author, Jay Fleischman

I've been a consumer protection lawyer since 1995, working to help people end their bill problems. I'm a faculty member at the Student Loan Law Workshop, a nationally recognized speaker, and a long-time member of both the National Association of Consumer Bankruptcy Attorneys and National Association of Consumer Advocates.

HERE is a Real-Life Example of How To Get A Midland Judgment "Vacated": 

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