Attorney General Erases $3.5 million from Debt Purchaser's Portfolio

Attorney General (West Virginia) Darrell McGraw announced today that his office has entered into a settlement agreement with Midland Credit Management, Inc. (“Midland”) of San Diego, California resulting in the cancellation of more than $3.5 million in credit card debt allegedly owed by approximately 3,500 West Virginia consumers. Midland had previously purchased the charged-off accounts for collection from Cross Country Bank of Wilmington, Delaware.

Attorney General McGraw’s office began investigating Midland in 2004 after receiving complaints from West Virginia consumers who had been sued or contacted by Midland to collect debts originally owed to Cross Country Bank. Cross Country Bank is a credit card bank that markets high interest credit cards to consumers with bad credit histories. McGraw’s office settled its lawsuit against Cross County Bank on June 21, 2005.

McGraw’s office questioned the propriety of collecting the accounts based upon the same concerns that led to his lawsuit against Cross Country Bank. As a result of these concerns, the Attorney General requested that Midland close all of the accounts with a zero balance and notify credit bureaus to delete all references to the account from consumers’ credit records. Midland agreed to do so in the settlement McGraw?s office announced today.

Attorney General McGraw stated, “I commend Midland for promptly doing the right thing after we brought our concerns about these accounts to its attention. As a result of our agreement with Midland, approximately 3,536 West Virginia consumers have been relieved of all further obligations to pay $3,548,539.80 in credit card debt. Because the accounts have also been deleted from credit records, consumers will no longer be denied access to new credit as a result of these accounts.”