State of Minnesota sues Florida company over debt buying
ST. PAUL -- Minnesota Attorney General Lori Swanson claims a Florida company that sought to collect money owed to banks broke the law.
A lawsuit Lori Swanson’s office filed Wednesday alleges that United Credit Recovery sent collection notices to bank customers that included what looked like official bank documents, but really were not.
“While made to appear as if they were individually and personally signed and sworn to by the bank officers before a notary, the affidavits were actually created using computer software that simply cut and pasted into an affidavit template a bank officer’s signature and notary from a different document,” Swanson office reported.
United Credit Recovery bought debt from Wells Fargo, US Bank, Bank of America, Fifth Third Bank and Huntington National Bank and tried to collect from the banks’ customers.
It is common, and legal, for debt collection companies to buy uncollected debts from banks and other businesses. They then try to collect from customers and pocket any profits.
In this case, the company bought overdraft fees that banks could not collect. For instance, the company paid $31 million to US Bank for the right to collect overdraft fees of $820 million.
The lawsuit does not claim any Minnesotan or bank lost money in the United Credit Recovery case, but that the company improperly used documents in an attempt to convince people to pay up.
US Bank and Wells Fargo told Swanson’s office they stopped selling to United Credit Recovery last year.
The company did not immediately respond to a request for comment.