Midland and PRA info from CFPB

QuestionsMidland and PRA info from CFPB
Katharina Petre asked 6 years ago

Thought those of us who are dealing with one or not of these companies might find this info interesting. Found this on another site…was posted early March. I really hope the CFPB sticks it to them!

Encore Capital Group ( aka Midland funding )

The CFPB is currently examining the collection practices of participants in the consumer debt buying industry. The Company is currently engaged in discussions with the staff of the CFPB regarding practices and controls relating to its engagement with consumers. In these discussions, the staff has taken certain positions with respect to the interpretation of existing legal requirements and the retroactive application of potential requirements from future rulemaking. The Company agrees with the staff on some items under discussion, and disagrees with the staff on others. As the Company seeks to resolve those areas of disagreement, it intends to vigorously defend its interpretation of the law and, consequently, may ultimately reach a negotiated settlement or become engaged in litigation. If the parties reach a negotiated agreement, it is reasonably possible that the Company could agree to pay penalties or restitution and could recognize pre-tax charges of in excess of $ 35 million and could agree to additional terms that may materially impact its future operations, collections or financial results. If the Company becomes involved in litigation, it is unable to estimate a possible range of loss, if any. These discussions and other supervisory or regulatory actions that may be taken by the CFPB in the future may have an adverse impact on the Company’s business, financial condition and operating results.


In certain legal proceedings, the Company may have recourse to insurance or third party contractual indemnities to cover all or portions of its litigation expenses, judgments, or settlements. In accordance with authoritative guidance, the Company records loss contingencies in its financial statements only for matters in which losses are probable and can be reasonably estimated. Where a range of loss can be reasonably estimated with no best estimate in the range, the Company records the minimum estimated liability. The Company continuously assesses the potential liability related to its pending litigation and regulatory matters and revises its estimates when additional information becomes available. As of December 31, 2014, the Company has no material reserves for legal matters. Additionally, based on the current status of litigation and regulatory matters, either the estimate of exposure is immaterial to the Company’s financial statements or an estimate cannot yet be determined. The Company’s legal costs are recorded to expense as incurred

Portfolio Recovery Associates




Consumer Financial Protection Bureau (“CFPB”) Investigation

In response to an investigative demand from the CFPB, the Company has provided certain documents and data regarding its debt collection practices. Subsequently, the Company has discussed a proposed resolution of the CFPB’s investigation, involving possible penalties, restitution and the adoption of new practices and controls in the conduct of our business. The Company has provided comments and engaged in discussions, which have included a number of face-to-face meetings between the Company and the CFPB staff. In these discussions, the CFPB staff has taken certain positions with respect to legal requirements applicable to our debt collection practices with which we disagree. If the Company is unable to resolve its differences with the CFPB through its ongoing discussions, it could become involved in litigation.

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