Midland Funding – Who are they?
Midland Funding is a company that buys bad debt (credit accounts that are in default are referred to as “bad debt”) to try to make a profit. These debts can be in the form of credit cards, auto loans, student loans or personal loans. For the most part, Midland focuses on credit card accounts when purchasing bad (or zombie) debt. Midland buys large groups of these allegedly defaulted credit card accounts for pennies on the dollar for the sole purpose of attempting to collect whatever they can on those accounts from individuals just like you. From the information that we have seen, they spend an average of about 3 cents per dollar on these account purchases. They file hundreds of lawsuits daily in hopes of collecting on old debt claims that have been charged off by the original creditor. At the time of this writing, Midland has been averaging about 500-700 lawsuits per week just in Pennsylvania. Yes, they really can do that, it is perfectly legal and it happens every day.
It is also perfectly legal for you to force them to prove a case, and, it is highly recommended. Please do not think that you “owe the debt” just because they say so or just because they can identify an old account of yours. This is the first mistake that most people make when dealing with a Midland Funding account. At some point, you possibly owed some debt to the original creditor but you likely do not owe anything to this debt buyer. Midland is NOT working for the original creditor and they are not collecting for the original creditor. They bought your account and they own it. This is no different than buying a car or a painting or any other asset. They own your account, an account that was bought through a clearinghouse type large scale sale. If you pay any money to Midland, the original creditor will not see a dime. Any payments made to Midland are pure profit for the company.
So How Does This Work?
Generally, Midland Funding buys these credit card accounts in blocks of about 25-35,000. Once they buy the accounts, they assign them to their in house collection agency, Midland Credit Management. Midland Credit will then begin the collection process. It should start with a Dunning letter. This is a letter that advises you of the sale and advises you of some of your rights. This letter is an attempt to collect a debt and it is the first thing that Midland will do on most cases. After the letter is sent, there may be a period of phone calls to you. Again, these are additional attempts to collect debt. Most of us do not want to take these phone calls, but most people don’t know how to make them stop. All that it takes is a simple letter on your part, directed to Midland Funding or Midland Credit Management, that says “do not contact me via phone again”. After that letter is sent, Midland will not be able to call you again. If they do, they will have violated your rights under the Fair Debt Collection Practices Act.
So, if Midland can no longer call you, what can they do next? Well, in most instances a follow up letter or two will arrive about 3 weeks apart. If you do not make payment arrangements during this time, in most instances, Midland will sue you. DO NOT FEAR A LAWSUIT! This is the best way to resolve a delinquent or defaulted account in most instances.
The Midland Funding Lawsuit
For the last several months, Midland has taken the approach of filing lawsuits at the local district justice. In my estimation, this is where about 90% of Midland lawsuits are filed. Your local magistrate has jurisdiction over any civil case that is $12,000 or less so it is proper for Midland to file there. After the lawsuit if filed, it will be served to you via one of 2 different ways. 1) the lawsuit can be served via certified mail; or 2) the local constable can hand deliver the lawsuit to you. It’s much cheaper to use certified mail so Midland will make that first choice almost every time.
Your first step should be to contact a consumer attorney. Do not contact the local attorney down the street, do not contact a personal injury attorney or the family attorney. You need a specialist, an attorney who is well versed in these types of cases. You want someone who has handled hundreds if not thousands of these cases. At your consultation you can discuss your options. Generally there are two… defend or settle. Let’s start with the easy one….settling. In most instances if a good consumer attorney is involved these matters can be settled for a fairly nominal amount, usually a percentage of the debt. If you are someone who cannot stand the thought of litigation or pressure then this can be an option for you. In most instances its not the best option but it is an option. The second option is to defend the case. This approach is fairly straightforward. You hire a consumer attorney then get out of the way. The attorney will attend the hearing and you will not attend. You should never attend a credit card hearing (one exception is if there is an identity theft allegation). If you appear then the Midland attorney can cross examine you and use your testimony against you. Attending a hearing can be fatal to your chances at winning. This is one of the main reasons why someone should never represent themselves at these hearings. You are a witness and you can damage your defenses. In most instances, Midland will hire an “appearance attorney”. This is basically a “temp” attorney. Midland, in most cases, will not have a witness at the hearing. So the hearing ends up taking place with a temp attorney, no witness, limited documentation, and your attorney. In this scenario, a positive outcome is the most likely result.
Other Midland Issues
Throughout the collection process, Midland might contact you several times via phone or mail. Keep notes of all phone calls, including date, time, who you spoke to, which account was discussed, and what was discussed. Please make sure to keep all letters from Midland (be sure to keep the envelopes that they come in) so that we can review them for discrepancies or rights violations. There are many instances where these letters in some way violate your legal rights and when that occurs we can take the offensive against Midland. We have filed several FDCPA claims against Midland for unfair debt collection practices. If a representative of Midland has contacted your neighbors or employer or relatives, or has threatened wage garnishment, or has committed any other illegal act, please contact our office immediately.
Our firm has a great deal of experience in defending credit card collection cases. If you have been sued in any Pennsylvania county, by Midland Funding or another collection agency, our firm can help you defend this claim at minimal cost, with a great chance at success. Contact our office here, call me at 412-823-8003 or visit our Pennsylvania Credit Card Legal Center.