On December 12, 2012, Minnesota Attorney General Lori Swanson announced a $500,000 settlement with debt collection firm Midland Funding, LLC, for alleged robo-signing practices. The lawsuit leading to the settlement, "is believed to be the first government suit against one of the [debt collecting' firms." Although the firm admitted no wrongdoing in accepting the settlement, one witness testified that $9,000.00 had been garnished from her account based on a debt from someone else's credit card.
Firms like Midland often buy debt for pennies on the dollar and then attempt to collect full (or substantially full) payment from debtors either through collection calls or, eventually, a lawsuit.
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