The Federal Trade Commission has filed an amicus brief in the U.S. District Court for the Northern District of Ohio, opposing a class action settlement in Vassalle v. Midland Funding LLC, its parent company Encore Capital Group, and Midland Credit Management. The lawsuit alleges that the debt buyer and debt collector violated the Fair Debt Collection Practices Act and related state law by engaging in the robo-signing of affadavits.
According to the FTC’s press release, if the court accepts the proposed settlement, “class members will have to give up too much in exchange for too little.” The settlement proposes that class members receive a maximum payment of $10, for which they’d “surrender their rights under the FDCPA and state laws to challenge Midland’s actions related to the company’s use of affidavits in debt collection lawsuits. This would include, the FTC argues, perhaps even the right to challenge improper default judgments obtained by Midland.”
The FTC’s amicus brief follows on the heels of the opposition of 38 state Attorneys General. According to the Wall Street Journal, the AGs argued that “approval of the deal would help the debt collection industry dodge enforcement actions by state officials,” and that Midland and Encore could use the settlement to argue that similar robo-signing lawsuits in other jurisdictions should be thrown out.
The judge in the case is scheduled to rule on the proposed settlement July 11.