The Law Office is investigating potential claims against Encore Capital Group, Inc. (“Encore Capital” or the “Company”) (NASDAQ: ECPG) concerning possible breaches of fiduciary duties by the Company or its fiduciaries. Encore Capital purchases and manages charged-off consumer receivable portfolios, including unsecured, charged-off domestic consumer credit cards, auto loan deficiency, and telecom receivables purchased from national financial institutions, major retail credit corporations, telecom companies and resellers. The Company, through its subsidiary Ascension Capital Group, Inc. also provides bankruptcy services to the finance industry.
Over the past three years, Encore's use of the legal channel of recovery has been subject to allegations and court findings that the company uses false and deceptive "robo-signed" affidavit practices, in violation of the Fair Debt Collections Practices Act and certain state consumer protection statutes. In September 2009, those practices were subject to an injunction by an Ohio District Court in a class action suit against Encore's subsidiaries. Most recently, the Minnesota Attorney General filed an action against Encore, further challenging their deceptive litigation practices. Additionally, the Attorneys General of both Texas and California are also undertaking investigations of Encore's debt collection practices.
The investigation concerns allegations that the Company’s business practices violated consumers’ rights, including violations of the Fair Debt Collection Practices Act (FDCPA) and comparable state statutes. On February 14, 2011, the Company disclosed that it has reached an agreement in principal to settle for approximately $5.2 million a class action lawsuit filed May 19, 2008, in the United States District Court for the Northern District of Ohio which alleged that the business practices of the Company's subsidiaries Midland Credit Management, Inc. and Midland Funding LLC violated consumers' rights under the FDCPA and the Ohio Consumer Sales Practices Act. On November 2, 2010 and December 17, 2010 two national class action lawsuits were filed in the United States District Court for the Southern District of California alleging that the Company’s subsidiaries violated the Telephone Consumer Protection Act by calling consumers’ cellular phones without their prior express consent.
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