Debt Collectors in Maryland: Consumer beware.

There has been a recent development of out of state debt collection agencies contacting Maryland residents and threatening to file lawsuits.

If these debt collection agencies do not have a license issued by the State of Maryland, they are illegally collecting money and erroneously filing claims within the district courts. Debt collections agencies must have a licenses issued by the state through Maryland State Collections Agency Licensing Board. Additionally, when filing a lawsuit, debt collection agencies must submit sufficient documentation to the courts which shows that they are the true owners of the debt and that the itemized debt is in fact owed by the company.  (1)

For example, two South Carolina debt collections companies, LVNV Funding LLC And Resurgent Capital Services LP., will have to pay a total of $1 million dollars to the State of Maryland to settle claims in which they violated Federal and State laws requiring licensure and prohibiting the submission of false or misleading claims or affidavits in courts.

Both companies agreed to dismiss 3,564 cases pending in Maryland District Courts, with a balance of $7.77 million. In addition, $3.8 million will be applied to the accounts of 6,246 consumers, whose cases have already been adjudicated or settled. (2). One of the priorities of the (MSCALB), is ensuring that debt collections agencies comply with state licensure and consumer protection regulations.

Consumers should inquiry about license to do business within the state, when confronted by a collection agency, whether in-state or out-of–state.

Read the full article in the 7-3-12 Daily Record, written by Steve Lash.

As always, feel free to contact the law office with any questions.

(1) Maryland Code Annotated, Business Regulations § 7-101 et seq.