Consumer complaint received 2024-12-06 00:00:00
Product: Debt collection — I do not know
Issue: Took or threatened to take negative or legal action — Sued you without properly notifying you of lawsuit
Company: ENCORE CAPITAL GROUP INC.
State: NJ

Complaint narrative:
Dear CFPB, I am writing to formally lodge a complaint against Midland Credit Management , Inc. ( " Midland Credit '' ) and XXXX XXXX for their actions in violation of the Fair Debt Collection Practices Act ( FDCPA ) and breach of contract related to an arbitration clause in the original creditor agreement. Specifically, Midland Credit has initiated legal proceedings against me without ever providing any initial communication regarding the alleged debt, as required by law. Additionally, XXXX XXXX has failed to ensure adherence to its own arbitration clause before assigning the debt, contributing to the breach of contract. Both entities actions have caused significant harm to me as outlined below. 

Failure to Provide Initial Communication and Notice of Debt ( 15 U.S.C. 1692g ( a ) ) : Midland Credit never sent me an initial communication regarding the alleged debt nor provided the required notice of my rights to dispute the debt and request validation within 30 days. This is a direct violation of their obligation under the FDCPA to notify consumers of their rights.

Failure to Validate Debt ( 15 U.S.C. 1692g ( b ) ) : Without providing any validation of the debt, Midland Credit proceeded to file a lawsuit against me. This failure to verify the debt before taking legal action further violates the FDCPA, as consumers have the right to dispute and receive validation prior to collection efforts.

Unfair Practices ( 15 U.S.C. 1692f ) : By suing me without providing the required initial communication or validation, Midland Credit has engaged in unfair practices. This tactic puts undue stress on consumers, forcing them into legal disputes without sufficient information to verify the legitimacy of the alleged debt. 

Harassment and Abuse ( 15 U.S.C. 1692d ) : The initiation of legal action without validating the debt constitutes a form of harassment and abuse. It is an attempt to intimidate me into payment without substantiating their claim.

False Representation ( 15 U.S.C. 1692e ) : Midland Credit has misrepresented their right to pursue legal action by failing to fulfill their legal obligations beforehand. This constitutes false representation of the character, amount, or legal status of the alleged debt.

Improper Credit Reporting : Midland Credit has continued to report the alleged debt to credit reporting agencies despite failing to validate the debt or provide initial communication. This action is damaging to my credit profile and constitutes another form of harm caused by their non-compliance with the FDCPA. 

Breach of Contract by Midland Credit and XXXX XXXX : The original creditor, XXXX XXXX, included a mandatory pre-arbitration procedure in their arbitration agreement, requiring a notice of dispute before initiating legal proceedings. XXXX XXXX failure to enforce this procedure before assigning the debt to Midland Credit, and Midland Credits subsequent failure to adhere to this clause, constitutes a breach of contract.

Emotional distress caused by the undue stress of defending against a baseless lawsuit.

Damage to my credit report and financial reputation due to Midland Credits improper reporting of an unverified debt.

Legal expenses incurred while responding to Midland Credits lawsuit. 

Find attached copy of the agreement with binding arbitration.

Company response to consumer: Closed with explanation