Delaware Attorney General Matt Denn announced Dec. 4 that Delaware joined 41 states and Washington, D.C., in reaching a settlement regarding debt collection practices with Encore Capital Group Inc. and its subsidiaries Midland Credit Management Inc. and Midland Funding LLC.

Debt buying involves buying and selling overdue debts from creditors and other account owners. Often purchased for pennies on the dollar, debt buyers seek to recover the full balance from consumers through collection attempts by phone and mail. Debt buyers, including Midland, also take consumers to court to collect the debts they purchase.

The settlement resolves the states’ investigation into Midland’s collection and litigation practices. The agreement settles claims that Midland signed and filed affidavits in state courts in large volumes without verifying the information printed in them, a practice commonly called robo-signing.

The settlement requires Midland to reform its affidavit signing and litigation practices. As a result of the investigation and settlement, when Midland files a lawsuit, it must have account documents about the debt before they file the case, including the amount of the debt, proof of an agreement and an explanation about why any additional fees are justified.

As part of the settlement, Midland will completely eliminate or reduce the judgment balances of about 20 Delaware consumers for a value of $27,133 in cases where Midland used an affidavit against them in court. Midland will notify impacted consumers by mail of the balance reduction, and no further action is necessary from the consumers.