Midland Funding Ordered to Cease Unlicensed Collection Activities in Maryland; Statute of Limitations and FDCPA Issues Also Addressed

October 3, 2009

The Maryland Department of Labor, Licensing and Regulation recently issued a Cease and Desist Order to a group of San Diego-based debt collectors alleged to have engaged in extensive unlicensed and illegal collection activities in Maryland.

The Order also addresses statute of limitations and Fair Debt Collection Practices Act requirements.

All Collection Activities Must Stop

Midland Credit Management, Inc., Midland Funding, Midland Portfolio Services LLC, and their parent company, Encore Capital Group, Inc. were ordered to immediately stop all collection activities in Maryland.

The order requires the companies to suspend (or “stay”) all current court cases filed against consumers in Maryland state courts.

The companies must also stop making collection phone calls and sending collection letters to Maryland residents.

Statute of Limitations Issue and Possible Fair Debt Collection Practices Act Violations

In addition to the licensing issue, the Cease and Desist order requires the companies to cooperate in a review of the companies’ files to identify any cases that were filed past the Maryland statute of limitations. The order also requires a review of the companies’ debt validation procedures.

However, the Order does not make clear exactly what triggered the DLLR file reviews.

What if I sent money to one of these companies or their attorneys when the companies were conducting unlicensed collection activity?

The companies have the right to an administrative hearing on the issue, but could eventually be required to pay penalties and restitution of more than $40 million.

In other words, they may be required to eventually return at least some of the collected funds to consumers.

What if I have a pending court case with Midland as a Plaintiff?

The Cease and Desist Order requires Midland Fundling LLC to submit court motions “staying” every case in which it is a Plaintiff. You can check your court file online to see if the required motion has been filed in your case.

What if you are contacted by one of these business entities or their attorneys while the cease and desist order is in effect?

Notify the Maryland Department of Labor, Licensing and Regulation immediatly. Use this link to file a complaint with the Maryland Department of Labor, Licensing, and Regulation.

How do I know if I have been contacted by an unlicensed debt collector?

Check here to check whether the debt collector who contacted you is licensed in Maryland.