U.S. District Judge Finds Midland Credit Management Submitted False Affidavits in Debt Lawsuits

October 4, 2009

It hasn’t been a good couple of weeks for Midland Credit and its various related entities.

Earlier, Midland Portfolio Services LLC, and its parent company, Encore Capital Group, Inc. were ordered to cease all collection activity in Maryland, including pending court cases. See this link for more information.

U.S. District Judge for the Northern District of Ohio David Katz recently ruled that Midland Funding LLC and Midland Credit Management Inc. have been routinely submitting false affidavits in filing debt collection cases. Read more about this case at this link.

Specifically, Judge Katz found that clerks at Midland Credit routinely signed affidavits stating that the individual clerk had “personal knowledge” of the debt being collected when they did not have such knowledge.

This situation is common in Maryland court filings as well. Many of the debt collectors submit affidavits that cannot possibly be based on the clerk’s personal knowledge of the debt– after all, the clerks are the employees of the debt purchaser / collector, and not the original creditor.

And, it is very unlikely the clerks review the accounts in question before signing the affidavit saying they have “personal knowledge” the debt is calculated correctly and is actually owed by the Defendant.

It is a mystery as to why the debt collector’s attorneys are willing to put these obviously false affidavits into evidence.

In an effort to try to get around this problem, some debt collection attorneys attempt to put old credit card statements into evidence as “self-authenticating” records.

But, for the records to be self-authenticating, a very specific procedure must be used under Maryland Rule 5-902(b). Among other steps, the rule requires the so-called “self-authenticating” records to be certified by an affidavit from the Custodian of Records. Many of these affidavits– if they are produced at all– include false statements.

But whose Custodian of Records must submit the Certification of Records affidavit? It would seem the required language of the Affidavit of Certification could only be truthful if signed by the Custodian of Records of the original creditor.

See Maryland Rule 5-902(b)(2) for the required language. You will need to click on the “Maryland Rules” FOLDER (in the middle of the list), then “Evidence,” then “Title 5,” then “Rule 5-902.”

But, in order to object to the faulty self-authentication of old account statements, the Defendant must act very quickly to (1) examine the documents in question (this may require a trip to the debt collector’s attorney’s office) and (2) file a written objection to the faulty self-authentication. Read Maryland Rule 5-902 here.

But, remember: even if a Defendant successfully challenges the faulty use of affidavits, the debt collection attorneys still have the option of proving their case the old fashioned way– by producing witnesses to authenticate any evidence they want to put into the record. (But do they have any evidence? That’s another question for another post.)

But, because they file hundreds and even thousands of cases each month, debt collection attorneys try to streamline the process as much as possible by relying on affidavits rather than producing witnesses for every case. This is understandable.

But the use of false affidavits is not.

Thank you to Minneapolis Consumer Attorney Sam Glover for the link to this story.