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Texas Attorney General Files Lawsuit against Debt Collector Encore

Encore Capital Group Inc has been sued by the state of Texas based on allegations that the debt collector was using deceptive and illegal tactics to collect debts from consumers. Texas Attorney General Greg Abbott announced the lawsuit on July 8, 2011, just three days before a federal court in Toledo, Ohio was set to determine whether to award a $5.7 million settlement on behalf of 1.4 million class members. On July 11th, Judge David Katz deferred the final decision on whether to approve the class action settlement, stating "I will review the record for the umpteenth time and in due course release an opinion."

Texas Attorney General Abbott and 37 attorneys general in other states oppose the class action settlement. The settlement initially would have equaled approximately $10 per class member, but by the time Judge Katz deferred his decision, the figure had risen to about $17 per class member.

Abbott wants Encore to return money that it improperly retained from consumers. He would also like Encore to face fines of up to $20,000 for each violation of state deceptive trade practices laws, as well as face other penalties. Abbott says that Encore has filed more than 60,000 collection lawsuits in Texas since 2002.

Encore typically buys debt from credit card companies, and according to its annual report from 2010, it had invested $1.8 billion to purchase 33 million accounts valued at $54.7 billion, at approximately 3 cents on the dollar. Encore has been the subject of much scrutiny and has been challenged in numerous courts for filing false or "robo-signed" affidavits. This practice is most commonly associated with the mortgage industry, but Encore and its subsidiaries, Midland Funding, LLC and Midland Credit Management, Inc. stand accused of hiring employees who signed thousands of affidavits, attesting to their knowledge that the company was entitled to collect debt, without actually reviewing the underlying documents.

The 38 attorneys general who oppose the $5.7 million dollar settlement consider the payout inadequate to address the harm done to consumers, while also revoking their right to defend themselves against the debt collector's existing lawsuits.

Are you being wrongfully sued for debt you do not owe? Are you currently suffering the consequences of creditor harassment or wondering how to deal with wage garnishment, repossession or foreclosure? Jacoby & Jacoby can offer experienced counsel in order to help you understand your legal rights and options in the face of overwhelming debt and deceptive or outright illegal practices by debt collectors and creditors. Located in Long Island, the firm represents clients throughout the area and stands ready to see how they can put their professional experience to work for you.

Contact a Long Island debt relief attorney at the firm today.

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