Encore Capital Settlement Gets Day in Court; Decision Pushed Off

A proposed settlement between debt buyer Encore Capital Group, Inc. and a class of plaintiffs was discussed Monday in a fairness hearing. The judge said that a decision would be coming “in due course.”

In 2009, a judge ruled that Encore had used “robo-signers” in its debt validation affidavit process and told the company to amend its practices. In early 2011, Encore moved to settle the suit after more plaintiffs were added to the case and copycat suits started popping up.

The hearing, before Judge David Katz in the U.S. District Court in Toledo, Ohio, gave opponents of the agreement a chance to state their objections to the settlement. All of the parties originally involved — Encore, the plaintiffs and their attorneys, and the judge — originally approved of the settlement. But outside groups have been voicing their concerns over the settlement.

A group of state attorneys general and the FTC have filed briefs and opinions objecting to the amount — $5.7 million — Encore is paying to the plaintiffs. Attorneys general in Minnesota and Texas have already moved to file suit against Encore for practices covered in the settlement. They are seeking to have the settlement thrown out.

But the attorney for the plaintiffs says that the amount Encore is paying is plenty, and he’s satisfied with the settlement.

“Some of the things they did were terribly wrong. And they admitted it was wrong. [Encore] is paying dearly,” Dennis E. Murray, Sr. told Reuters after the hearing.

The judge on the case also seemed exasperated by all of the outside attention the agreement has attracted.

“I will review the record for the umpteenth time and in due course release an opinion,” Katz said.