Have you been sued by Midland Credit Management? But you have no idea who Midland Credit Management is?
You're not alone. Many people who have defaulted on credit card debt or have fallen behind in student loan payments receive correspondence and are sometimes served with lawsuits from the debt company called Midland Credit Management (Midland).
Midland is one of the largest junk debt buyers in the country. Its business model involves purchasing charged-off consumer credit accounts from banks and finance companies (often for pennies on the dollar) and demanding the full amount it claims is due.
The best way to protect yourself when you get served with a lawsuit from Midland CreditManagement is to push back by responding to the lawsuit. Typically, junk debt buyers like Midland Credit Management will not have the proper paperwork to prove their case against you.
Attorney, Ryan Peterson at Peterson Legal has spent the past six years representing consumers against banks and debt collectors, including LVNV. In 2020, he helped dozens of clients defend themselves against claims by Midland Credit Management
Some defenses include Midland Credit Management's inability to prove it's the rightful owner of the account, its failure to produce or authenticate the original creditor's billing statements, or its lack of proof that the account belonged to you in the first place.
“I have a 100% success rate in getting these lawsuits eventually dismissed,” Peterson said.
What is a junk debt buyer?
A junk debt buyer is a company that makes its money by purchasing delinquent credit accounts from other banks or financers. They typically purchase the accounts for cents on the dollar of the remaining balance and demand full payments from the consumer to earn a large profit. The owed debts are often relatively small, so junk debt buyers will collect massive quantities to make their money.
Who is Midland Credit Management, Inc.?
Midland Credit Management, Inc. (“Midland”) is a junk debt buyer and servicer of charged-off consumer credit accounts (mostly credit cards). Midland is a wholly owned subsidiary of Encore Capital Group (ECPG), a company that is publicly traded on the stock market. Prior to 2019, Midland only serviced accounts for its affiliate, Midland Funding, LLC. Since that time, Midland began purchasing the accounts directly.
Why is Midland Credit Management contacting me?
Midland likely believes that one of the accounts it purchased belonged to you and that you failed to pay back the original creditor. Now that Midland owns the debt, it will attempt to seek payment in full.
But I have no business relationship with Midland. Do I still have to pay them?
Contracts are freely assignable and, with very limited exceptions, the credit account belonging to you can be sold to a junk debt buyer, including Midland. As we always tell people, no one chooses to do business with Midland, but they can choose to do business with you.
What if I don't recognize the account Midland says I owe?
Ask them to send you proof. In some cases, you don't owe the debt and they're bothering the wrong person. In other cases, the account is yours, but it was a co-branded account. For example, retail companies, such as Amazon, Gap, Victoria's Secret and JC Penney, often use financers such as Synchrony Bank and Comenity Bank to issue store-branded credit cards. Often, these are debts that haven't been collected on or thought about in years and hold a relatively low remaining balance, so it is possible the consumer may have forgotten about the account.
How much did they pay for my account?
That's difficult to say, and probably isn't something you'll be able to find out. According to documents filed with the SEC by Midland's parent company, the average purchase price paid by Midland is twelve (12) cents on the dollar. In other words, if Midland is demanding you pay it $1,000.00, on average, it has paid about $120.00 for the account.
Will Midland sue me?
Probably. Midland files thousands of lawsuits every year in the state of Minnesota through the law firm Messerli & Kramer, P.A. Here is what a summons and complaint might look like. They are real lawsuits, and you must respond to avoid a default judgement.
Can you represent me in that lawsuit? And how much would it cost me?
Yes, we can help you, just as we've helped hundreds of Minnesota consumers who have been sued by junk debt buyers. We charge a flat fee depending on the amount of the alleged debt, which allows you to know exactly how much you'll pay in attorney's fees upfront rather than worry about hourly billing.
Can you win?
Yes, we can. Many of our clients walk away from the debt owing nothing and having paid no more than our initial attorney's fee. In other cases, we settle for a small amount of the balance of the debt and make sure that a judgment isn't entered against you. Regardless of outcome, we will guide you every step of the way.
What if I can't pay?
Midland has a consumer bill of rights that it has posted on its website, and you can find it here. Depending on your circumstances, Midland will agree to pause or cease collections altogether.
I know I don't owe the account, but Midland won't leave me alone. What can I do?
Contact our firm as soon as possible. Demanding money from someone who doesn't owe it is often a violation of the Fair Debt Collection Practices Act
What if I paid Midland, but the account is still on my credit report saying I owe money?
You have the right to demand the credit bureaus complete an investigation into the account by writing them a letter, often called a “dispute”. You can find instructions here.