Midland Funding is one of the biggest buyers of unpaid debt in the United States.
In most cases, it purchases debts from banks, credit card companies, or auto loans for pennies on the dollar and then attempts to recover those accounts. You may not be aware, especially if you are unfamiliar with credit repair companies in Austin, Texas or debt collection firms. Still, Midland could have bought an old debt of yours or that of your family member from a cell phone company, credit card firm, or other lending institutions.
Sometimes, you may receive a letter from the company trying to sue you and secure a judgment requiring you to allocate a portion of your paycheck towards your debt. It can also ask the courts to freeze your bank accounts; it’s imperative that you take these matters seriously.
Whenever an account goes past 180 days without payment, receives less than the required amount, or one fails to successfully negotiate pay for delete, the original creditor may decide to sell it. According to U.S. federal laws, debt or loan accounts can be sold to a new firm without the borrower’s knowledge or consent. In most cases, debt collection agencies opt to take such steps since it would cost more funds to try and collect the debt than to sell to a third-party firm like Midland Funding, LLC.
In such third-party situations, Midland Funding will now begin to appear as one of the items on your credit report as a debt in collections after it has acquired the debt. On the other hand, the creditor can also report your account as a charge-off, but it will remain on your report for seven years from the initial delinquency date, regardless of when the original lender handed your account over to Midland Funding, LLC.
It’s also important to understand that Midland Funding operates as a third-party collector in all situations. After the balance is transferred, it will own and service the specified debt and loan accounts; it will also be responsible for contacting the debtor through calls and other correspondence in a bid to collect. This can be confusing for some people, especially when they call the original lending firm to inquire about what happened to the debt or if they want to make a payment on it. In some cases, you may be shocked that the company has no knowledge of your debt and cannot find you on its system. This is because once the debt is sold, it has no obligation to maintain your file.
When it comes to debt collection, Midland Funding LLC and Midland Credit Management (MCM) must secure your originally signed contracts and verification documentation of the amount owed. In case they attempt to take you to court without these documents detailing your alleged debt, you have the right to protect yourself against such measures as per the Fair Debt Collection Practices Act (FDCPA).
That said, nobody would like to be in debt. Therefore, finding yourself unable to pay bills on time can have devastating effects both personally and financially. Once some debt goes unpaid and moves into collections, other debt tends to head in that same direction. This seems especially true when a consumer is unable to pay due to personal life events such as the loss of a job or a death in the family.
What can be even more stressful in experiencing financial hardship, is being approached by debt collectors employing every strategy they can in an effort to collect outstanding debt from the consumer. The best tool a consumer can have to work through the circumstances of being placed in collections and contacted by collectors is knowledge–knowledge of their rights under the law and knowledge of strategies they can use when dealing with debt collectors.
As mentioned earlier, one such collector, Midland Credit Management, a collection agency owned by publicly traded Encore Capital Credit Group, will employ a variety of tactics to secure payment for outstanding debt. Understanding what Midland is and what its reputation consists of will help consumers who are forced to deal with it communicate in a way that best protects themselves.
Midland Credit Management, aka Midland Funding, has been in business since 1953, and has been on file with the Better Business Bureau (BBB) since 1992. Like all other debt collectors, it purchases debt accounts from a variety of lenders everywhere and then pursues consumers for collection of those accounts.
Midland has an A+ rating with the BBB, and has been given 3.7 out of five stars for its business practices. Despite that, many negative reviews of Midland Credit Management are currently visible on the BBB website, which is not even taking into consideration the numerous complaints about the company on other consumer advocate websites.
The number one complaint against Midland is that it breaks promises made, or acts on debt that is full of error or completely false. According to the BBB, in 2015, a court case was settled between the Consumer Financial Protection Bureau and Encore Capital Group (Midland’s parent company) over the allegations that “the business bought debts that were inaccurate, lacked documentation, and unenforceable and collected payments from consumers using false statements and false court documents. Under terms of the Assurance, the business agreed to refund consumers $42 million, pay a $10 million penalty, and stop collecting over $125 million worth of debts.”
Although settlement of the dispute does not admit guilt, this case, combined with the wealth of consumer complaints made in the last decade, provides a clear indication that Midland may be engaging in practices that violate consumer rights under the FDCPA.
The FDCPA is a federal law passed in September 1977 to help protect consumers from a high prevalence of predatory debt collection practices that were often abusive in nature. The act set out specific requirements that clearly defines the types of practices lenders and debt collectors can and cannot employ in attempts to collect a debt; violation of any of these requirements is prosecutable under the law.
According to the Fair Trade Commission (FTC), the FDCPA restricts lenders and debt collectors from engaging in the following practices:
Harassment such as:
Threats of violence or harm
Making public names of those consumers who refuse to pay (exception: giving the information to the credit reporting companies)
Using inappropriate/obscene language
Repeatedly using the phone to annoy or harass
False Statements such as:
Saying they are attorneys or government representatives when they are not
Telling the consumer he/she has committed a crime
Lying by saying they operate or work for a credit reporting company
Misrepresenting the amount of debt owed
Saying that letters or paperwork they have sent are legal papers
Saying that papers they’ve sent aren’t legal forms when they are
Telling a consumer they will be arrested if they don’t pay
Saying they will seize, garnish, attach, or sell a consumer’s property or wages unless they are permitted by law to take the action and intend to do so
Saying they will take legal action against a consumer, if doing so would be illegal or if they don’t intend to take the action
Misrepresentation such as:
Giving false credit information about a consumer to anyone, including a credit reporting company
Sending a consumer anything that looks like an official document from a court or government agency if it isn’t
Using a false company name
Unfair Practices such as:
Trying to collect any interest, fee, or other charge over the amount owed unless the contract that created the debt, or state law, allows the charge
Depositing a post-dated check early
Taking or threaten to take property unless it can be done legally
Contacting a consumer by postcard
If you find yourself in the position of having to deal with Midland Funding or any other debt collector, there are specific steps you can take to protect yourself while communicating with them. First, let them know you will only be corresponding with them in writing, and that they are not allowed to call you anymore.
Lastly, if you settle for removal (paying an amount less than the total owed in exchange for your record being removed from Midland’s report to the credit bureaus), make sure it is in writing. One of the many complaints against Midland is that it promises to settle for removal, and then does not. If you don’t have it in writing, it is essentially the company’s word against your own.
Dealing with debt collectors can add to the immense amount of stress already felt from falling behind on debt repayment. Knowing your rights and the specific measures you can take when dealing with debt collectors will help give you some breathing room when you can start the process of recovering from bad debt.
Wondering if debt collectors can take you to court? Check out our latest post.
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