Midland Funding Illegally Collecting Debts Without a License, Says Massachusetts Appellate Court

consumer protection midland fundingDebt-collection giant Midland Funding has received a stunning threefold loss in the Massachusetts Appellate Division. The court held that Midland Funding is required to get a debt collection license, that it violated the Massachusetts Consumer Protection Act, and that it violated the Fair Debt Collection Practices Act.

The case started when Midland Funding sued a consumer in Massachusetts state court. Midland Funding claimed it had purchased a credit card account formerly held by the consumer.

To Midland Funding’s surprise, however, the consumer filed a counterclaim, alleging Midland Funding was in breach of numerous consumer-protection and debt-collection laws, such as the Fair Debt Collection Practices Act.

“Midland is a corporation whose primary business is purchasing on a large scale defaulted credit card debt in order to collect on those past-due accounts,” wrote the court. Because of this, the court rejected their argument that it was not a debt collector.

Despite the fact that Midland Funding outsourced much of its collection activity to a related entity, Midland Credit Management, Midland Funding was nevertheless required to obtain a debt-collection license before engaging in debt collection in Massachusetts.

Moreover, by failing to get a debt-collection license, they also violated the Massachusetts Consumer Protection Act and the FDCPA.

It remains to be seen whether Midland Funding will appeal the decision, but the decision nevertheless puts the status of its collection activities in Massachusetts in issue, and gives consumers further grounds to defend against illegal debt collection.

The decision is here: Midland Funding v. Juba

Culik Law is a Massachusetts Consumer Protection Attorney and has represented numerous Massachusetts consumers against virtually all major debt collectors, including Midland Funding and Midland Credit Management. If you are dealing with a debt collector, if you have been harassed by a debt collector, or you have debts you wish to settle, contact us to see if we can help.

Massachsuetts consumers have many rights under the Massachusetts Consumer Protection Act (Chapter 93A) and the Fair Debt Collection Practices Act (FDCPA) to protect them against predatory debt collectors. It is important to know your rights, document your interactions with debt collectors, and take action when they have violated your rights. There are many situations that put a consumer in the path of  a debt collector, including job loss, illness, or a death in the family. It is never as simple as “pay your debts and you’ll be fine.” When any company, including debt collectors, are breaking the law and are taking advantage of consumers, they must be held accountable. As a consumer protection attorney, that’s what we do.

Josef Culik

Josef Culik

Attorney Joe Culik has built his reputation on helping people and has dedicated his practice in Boston, Massachusetts to consumer protection, employee rights, and individual personal injury. He has advocated for individuals against some of the largest companies in America and has a passion for helping people uphold their rights against impossible odds. He has filed both individual and class-action lawsuits against most of the major banks, against some of the biggest debt collectors and credit reporting agencies, as well as insurance companies and corporate employers. Contact Joe