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The Maryland Commission of Financial Regulation announced on July 2, 2012 that the Maryland State Collection Agency Licensing Board had reached an agreement with debt collectors LVNV Funding, LLC and Resurgent Capital Services, LP to settle claims that the two companies had violated the Fair Debt Collection Practices Act (FDCPA) and various Maryland state collection laws by employing attorneys who filed false or misleading complaints and affidavits in state courts, misrepresented the amounts of the claims and engaged in collection activities without a license.
Under the terms of the agreement, LVNV and Resurgent will pay the state a fine of $1 million, and will dismiss 3,564 pending cases totaling $7.7 million in claims, but will be able to re-file them. The companies will also provide restitution for consumers in the form of partial credits in cases in which the companies obtained judgments, as well as in some cases that the companies settled with the consumer-defendants prior to judgment. The restitution will total approximately $3.8 million. In turn, the collection agency licenses of LVNV and Resurgent are to be fully reinstated.
LVNV is a consumer debt purchaser that acquires defaulted consumer debt in the US and internationally, while Resurgent is a collection agency that services the consumer debt owned by LVNV and other business entities. Both companies are part of the Sherman Financial Group LLC family of companies. Maryland's Licensing Board had issued a Summary Order to Cease and Desist against LVNV and Resurgent on October 25, 2011 after the Licensing Board determined that the companies had acted in violation of various federal and state debt collection laws.
Both companies cooperated in reaching a settlement and denied any liability or wrongdoing. The voluntary agreement does not constitute any admission of liability on the part of either entity.
"As Marylanders recover from the recent recession, we are determined to ensure that our residents are treated fairly and afforded the protections that they deserve," said Mark A. Kaufman, Maryland Commissioner of Financial Regulation in a press release. "This settlement highlights the continuing efforts of our Collection Agency Licensing Board to oversee collections activities of all types, including those related to collections litigation."
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