Midland Funding has a reputation of buying soured credit card debt and heading straight to court to collect, a tactic that consumer lawyers say scares people into settling, the Washington Post reported yesterday. The strategy has been so effective that in Northern Virginia alone Midland has recovered more than $27 million since 2003 — a year the firm filed a few dozen cases at most. But in the past four years, it has flooded courts from Loudoun County to Prince William County, Va. with nearly 11,000 lawsuits as companies overwhelmed by delinquent accounts have sold them for pennies on the dollar. And it’s not just happening in Northern Virginia. State attorneys general, judges and consumer lawyers nationwide are complaining of a broken debt collection system that allows companies such as Midland to file tens of thousands of cases built on flimsy documentation. The information Midland relies on is the same as is “used when credit card users call or get their balance online,” said Greg Call, general counsel of Encore, Midland’s parent company.
