On Monday, Minnesota Attorney General Lori Swanson took the first step toward filing suit against Midland Credit Management when she asked a federal court to clarify that a pending class action settlement didn’t preclude the state from pursuing an enforcement action against Midland.

In a press release issued by her office, Attorney General Swanson charged that Midland defrauded Minnesotans and Minnesota courts by robo-signing affidavits, which where then filed in order to obtain judgments against consumers. She specifically went after Midland as a debt buyer, and noted that Midland Funding and Midland Credit Management have bought $54.7 billion in old debt, and have filed 245,000 lawsuits against consumers since 2009. In Minnesota, the company has filed over 15,000 lawsuits since 2008, and has obtained default judgments against consumers in 98 percent or more of the cases. Default judgments are typically awarded when the consumer doesn’t appear in court to defend himself or herself – either because he or she isn’t aware that there’s a pending lawsuit or because the consumer doesn’t understand that there is recourse available. The AG’s press release noted, “Some citizens sued by Midland state that they did not contest the lawsuit because they were not served with it, could not afford an attorney, or did not recognize the name of the debt buyer, since they had never done business with it.”

At issue in the Attorney General’s filing is “robo-signing,” which her office’s press release describes as “the practice of signing off on mass-produced, computer-generated legal documents without reading them or verifying the accuracy of the contents in order to speed up the collection process.” Debt collection agencies must provide courts with proof – in the form of affidavits – that the consumer named in the lawsuit actually owes the money According to the AG’s press release, “The affidavits, however, did not constitute “proof” of the debt because they were robo-signed by people who did not read them and/or who had absolutely no knowledge about the alleged debts to which they attested.”

The AG’s actions are yet another step in Minnesota’s journey to make debt buyers and debt collectors act in good faith and abide by the law. In its investigative reporting series, “Hounded,” the Minneapolis Star-Tribune did an outstanding job highlighting the ways in which debt collectors routinely flout the Fair Debt Collection Practices Act. U.S. Senator Al Franken (D-MN) introduced the End Debt Collector Abuse Act in the last Congress. Minnesota is sending a clear message to debt buyers and debt collection agencies that they need to clean up their act; let’s hope that other states are as dogged in their enforcement efforts as Attorney General Swanson.