18.104.22.168 Identifying Some of the Largest Debt Buyers
Using data from the Nilson Report, the FTC compiled a chart of the ten largest companies purchasing credit card debt from credit card issuers from 2005 to 2011.180 In 2011, Sherman Financial Group, L.L.C. (subsidiaries include LVNV Funding, L.L.C. and Resurgent Capital Services, L.P.) ranked first, Encore Capital Group, Inc. (subsidiaries include Midland Funding, L.L.C. and Midland Credit Management, Inc.) ranked second, and Portfolio Recovery Associates (currently known as PRA Group, Inc.) ranked third.181
Unlike Sherman Financial, Encore and PRA are both public companies whose filings with Security and Exchange Commission (SEC) provide information about the amount of debt these organizations purchase. For example, in 2016 Encore purchased portfolios of debt with a face value of $9.8 billion182 and PRA purchased portfolios of debt with a face value of $10.5 billion.183 An analysis of 10-K filings by both companies from 2002 to 2015 found revenue growth of at least twenty percent every year during that period.184
Recent state and local studies of the number of lawsuits filed by certain debt buyers have consistently shown that Midland Funding and Portfolio Recovery are top filers.185
180 Fed. Trade Comm’n, The Structure and Practices of the Debt Buying Industry, at T-6 (Jan. 2013).
182 Encore Capital Group, Inc. Annual Report on Form 10-K for 2016 at 37.
183 PRA Group, Inc. Annual Report on Form 10-K for 2016 at 59.
184 Lisa Stifler, Debt in the Courts: The Scourge of Abusive Debt Collection Litigation and Possible Policy Solutions, Harv. L. and Pol’y R. Vol. 11-1, 96 (2017).
185 See, e.g., Testimony of April Kuehnhoff, National Consumer Law Center, Before the Massachusetts Joint Financial Services Committee in support of S.120/H.2811, An act relative to fairness in debt collection (Sept. 25, 2017) (statewide review of cases filed by debt buyers in Massachusetts for 2015 found that Midland Funding and Portfolio Recovery ranked first and second, with 32,009 lawsuits and 9,410 lawsuits, respectively); Ellen Harnick, Lisa Stifler, and Safa Sjadi, Center for Responsible Lending, Debt Buyers Hound Coloradans in Court for Debts They May Not Owe, Appx. 1 (Dec. 2016) (statewide review of cases filed by four debt buyers in Colorado for 2013–2015 found that Midland Funding ranked first with 22,121 lawsuits and Portfolio Recovery ranked second with 9,074 lawsuits); Chris Albin-Lackey, Rubber Stamp Justice: US Courts, Debt Buying Corporations, and the Poor 15 (Human Rights Watch, Jan. 2016) (in New York state, debt buyers were four of the top ten filers in 2014; of these four, Midland Funding was first with 22,731 lawsuits, followed by Portfolio Recovery with 21,356); Peter Holland, “Junk Justice: A Statistical Analysis of 4400 Lawsuits Filed by Debt Buyers,” 26 Loy. Consumer L. Rev. 179, 216 (2014) (in Maryland in 2013, Midland Funding was the top debt buyer filing in state courts with 9,619 lawsuits, followed by Portfolio Recovery with 6,608).