The Maryland State Collection Agency Licensing Board has reached an agreement with LVNV Funding LLC and Resurgent Capital Services, L.P. to settle alleged violations of federal and state debt collection laws. The settlement includes a penalty of $1 million, agreement to dismiss more than 3,500 cases pending in Maryland district courts having balances of over $7.7 million, and credits totaling over $3.8 million which will be applied to the accounts of over 6,200 consumers whose cases have already been adjudicated or settled. LVNV is a consumer debt purchaser that acquires consumer claims in default, while Resurgent is a collection agency that services the consumer claims owned by LVNV and other business entities. They both are part of the Sherman Financial Group LLC family of companies.
In October 2011, the Agency issued an Order to Cease and Desist and Summary Suspension of Collection Agency Licenses against LVNV and Resurgent after the Agency determined that LVNV and Resurgent had engaged in violations of various Maryland state and federal debt collection laws, including the Maryland Collection Agency Licensing Act, the Maryland Consumer Debt Collection Act, and the Fair Debt Collection Practices Act. Conduct included allegedly engaging in collections activities in Maryland without being properly licensed, employing attorneys that filed false or misleading complaints and supporting affidavits in state courts on their behalf, and misrepresenting the amounts of the claims.
Under the terms of the settlement agreement, LVNV and Resurgent will dismiss without prejudice all pending cases in the District Court of Maryland; will provide partial credits in cases with judgments, as well as in some settled cases. The collection agency licenses of LVNV and Resurgent will be fully reinstated.
Dismissals and credits will be submitted to the courts within 15 days of the agreement without any need for action by consumers. For further information, consumers can contact Resurgent Capital Services, L.P. at 1-866-316-1830.
3,564 cases are being dismissed without prejudice, and the amount claimed in these cases totals $7,770,564. For cases with judgments, LVNV will provide a credit for all pre-judgment interest plus attorneys’ fees awarded by the court, with credits being applied to the account balance as of March 12, 2012. If the credit exceeds the balance remaining on the consumers’ account, the account shall be considered satisfied in full as of that date. There are 5,793 consumers entitled to credits pursuant to this provision, and the amount of all credits totals $3,609,367.
For all cases in which there was a settlement prior to a judgment, LVNV credit the accounts with the total amount of the settlement that exceeds the amount claimed, which is the amount sued for in the case excluding any interest, attorney fees and court costs, with the credits being applied to the account balance as of March 12, 2012. There are 453 consumers entitled to credits and the amount of all credits totals $235,824.