“Pennies on the dollar” is perhaps an overstatement. According to Paragraph 4 of a January 6, 2015 settlement agreement reached with the New York State Attorney General, Encore Capital Group, Inc. (which is publicly traded and is the parent of junk debt buyer Midland Funding, LLC) “paid approximately $1.2 billion to acquire portfolios, primarily charged-off credit card portfolios, with a face value aggregating $84.9 billion.” When you do the math (1.2 billion divided by 84.9 billion), that comes out to about 1.4 cents on the dollar — i.e. less than two pennies on the dollar.
As part of the settlement, Encore promises that it will stop suing to collect debts which are barred by the statute of limitations in New York. The full text of the settlement is Here.
Debt buyers routinely sue consumers after the statute of limitations has run, both in Maryland and around the country. The FTC’s study of the large debt buyers found that 30% of debts purchased were at least three years old and therefore were likely beyond the statute of limitations in Maryland and some other states.
Encore entities filed law suits and obtained thousands of judgments on time barred debts: