* Attorneys general call settlement "paltry"
* Class-action suit targeted robo-signing of affidavits
* Settlement announced in February
* Encore shares down 1 pct
(Updates with Encore comment)
NEW YORK, June 3 A group of 38 state attorneys
general is opposing a proposed class action settlement with an
Encore Capital Group Inc (ECPG.O) unit over robo-signed
The proposed settlement is "paltry" and unfair to
consumers, the group said in a June 1 court filing.
The settlement, announced in February, would provide up to
$5.7 million for 1.4 million class members. San Diego-based
Encore, which often buys debt from credit card companies,
agreed to settle claims that its Midland unit relied on false
affidavits to bring debt-collection lawsuits.
"Under any interpretation, the ten-dollar-per-class-member
settlement is not fair, reasonable or adequate to address the
harm incurred," the attorneys general, led by New York Attorney
General Eric Schneiderman, said in the filing in federal court
The attorneys general, from states including California,
Ohio and Massachusetts, also said the agreement unfairly forces
class members to release any claims against Midland, allowing
the company to pursue claims against plaintiffs.
"The settlement strips class members of their right to
defend against existing lawsuits and to seek to vacate
judgments obtained through defendants' use of false and
misleading affidavits," the attorneys general wrote.
They also objected to $1.5 million of fees for plaintiffs'
counsel and a "generous" payment of $8,000 for the named
plaintiffs in the case.
"Encore believes this settlement is fair, reasonable and
adequate," Encore said in a statement. "The company is
confident in the integrity and accuracy of the underlying debts
U.S. District Judge David Katz in Toledo, Ohio,
preliminarily approved the settlement in March and set June 1
as the deadline for any objections. A fairness hearing is
scheduled for July 11.
Plaintiffs' lawyer Dennis Murray Sr. of the law firm Murray
& Murray did not immediately return a call seeking comment.
All 50 states are investigating robo-signing and other
improper practices by banks in the mortgage industry.
In May, in a separate case, Minnesota sued Midland for
filing robo-signed affidavits.
Encore shares were down 1 percent to $32.52 in afternoon
trading on Friday.
The case is Vassalle et al v. Midland Funding LLC, U.S.
District Court, Northern District of Ohio, No. 11-00096.
(Reporting by Carlyn Kolker; Editing by Steve Orlofsky and