Thousands of pending debt-collection cases were dismissed from Maryland District Court this week as part of a settlement between the state and two collection agencies.
Chief Judge Ben C. Clyburn dismissed 3,564 cases Tuesday as part of an agreement reached earlier this month, between the State Collection Agency Licensing Board and two collection agencies, LVNV Funding and Resurgent Capital Services.
Both companies faced allegations that they violated state and federal law by engaging in collection activities without proper licensing and hiring attorneys that filed false or misleading statements in court, according to the state Department of Labor, Licensing and Regulation.
LVNV purchases consumer debt from banks and finance companies, and Resurgent Capital manages the collection of that debt, according to DLLR.
“In this current recessionary economy, the District Court has been seeing an increasing number of debt collection cases,” Clyburn said in a statement. “We have been responding to many issues related to debt-buying and we now have new rules in place that help make the process more transparent.”
The pending cases were dismissed without prejudice, meaning they can be refiled, and the settlement doesn’t constitute an admission of guilt or wrongdoing by the companies, according to DLLR.
“We are pleased that we have been able to reach such a positive and amicable resolution of all outstanding issues with the Maryland DLLR” said Tom Thurmond, executive vice president of Resurgent, in a statement.
“We are committed to working proactively with all regulators in a manner that reflects our dedicated concern for consumer protection and our commitment to ethical corporate behavior.”
Attempts to contact LVNV were redirected to Resurgent Capital.
The companies also will pay $1 million to the state and apply a credit of $3.8 million to more than 6,000 consumers whose cases were already settled or adjudicated.