Sued by Encore Capital Group in Montana? Here's What to Do Next

2015 · consent order

$52M+ total ($42M consumer refunds + $10M CFPB civil money penalty), plus order to stop collection on $125M+ in debts

CFPB consent order against Encore Capital Group, Midland Funding, Midland Credit Management, and Asset Acceptance finding the companies attempted to collect debts they didn't own or that were inaccurate, relied on robo-signed affidavits in court, and pressured consumers with misrepresentations about lawsuits. The order required documentation before filing suit and disclosures when collecting on time-barred debt.

CFPB source

2020 · lawsuit settled

$15M CFPB civil money penalty + $79,308.81 consumer redress; extended 2015 order conduct provisions for five additional years

CFPB filed suit and reached a stipulated settlement finding Encore and its subsidiaries violated the 2015 consent order by suing consumers without possessing required documentation, failing to provide required disclosures when consumers requested loan documentation, and suing on debts whose statutes of limitations had expired in violation of the FDCPA and CFPA.

CFPB source

Statute of Limitations Defense

In Montana, the statute of limitations for credit card debt is 5 years. If your last payment was more than 5 years ago, the debt is time-barred. Encore Capital Group has been the subject of CFPB findings related to suing on time-barred debts — check your dates carefully and raise the SOL defense in your Answer.

Lack of Standing / Chain of Title

As a debt buyer, Encore Capital Group must prove they actually purchased your specific account. Demand the complete chain of title — the purchase agreement, bill of sale, and assignment documents. In Montana courts, failing to produce this documentation can result in dismissal.

Challenge the Amount

Demand a complete accounting from the original creditor's last statement through the current claimed balance. Any unauthorized fees, post-charge-off interest, or collection costs not in the original agreement should be disputed line by line.

Montana Wage Garnishment Exemptions

Federal limits apply.

Montana Consumer Protection Act

In addition to the federal FDCPA, Montana's Montana Consumer Protection Act may provide additional protections and remedies against Encore Capital Group's collection practices.

Montana Court System

Small claims limit $7,000. Justice courts handle smaller civil cases. District court for larger amounts. Filing fees in Montana typically range $30-$250.

What is Encore Capital Group?

Encore Capital Group is the largest publicly traded debt buyer in the U.S. They own LVNV Funding LLC and Midland Credit Management. If you are sued by either, Encore is the parent company.

Has the CFPB taken action against Encore?

Yes. The CFPB has ordered Encore subsidiaries to pay millions in fines and restitution for illegal debt collection practices including suing without proper documentation and collecting on time-barred debts.

Can I sue Encore Capital Group?

You would typically sue the subsidiary that contacted you (LVNV Funding or Midland Credit Management), but in some cases the parent company may also be liable for directing illegal collection practices.

How does Encore get my debt?

Encore purchases portfolios of thousands of defaulted accounts from banks and credit card companies, usually for 3-5 cents per dollar. They then attempt to collect the full original balance plus interest and fees.

How long to respond in Montana?

21 days from service.

What is the SOL?

5 years for credit cards and open accounts. 8 years for written contracts.

Can wages be garnished?

Yes. Federal limits apply.

Where are cases filed?

Small claims up to $7,000. District court for larger amounts.

Is the collection agency suing me actually licensed in Montana?

Most third-party collectors and debt buyers operating in Montana are required to hold a collection agency license issued by the Montana Department of Administration under MCA Title 32, Chapter 4, Part 3. You can verify a license by searching the Department's online licensee lookup or calling the licensing bureau. If the company suing you is not currently licensed, that is a complete defense to the collection action under Montana law, because an unlicensed collector lacks legal standing to collect or sue on the debt. Courts have dismissed cases on this ground, and consumers have also pursued affirmative claims under the Montana Consumer Protection Act when an unlicensed entity attempted collection. Before you spend energy fighting the underlying balance, verify the license. If the license lapsed at the time the suit was filed or at the time demand letters were sent, raise it in your answer as both an affirmative defense and a potential counterclaim, and request that the case be dismissed.

How long do creditors and debt buyers have to sue me in Montana?

Montana's statute of limitations on a written contract, including most credit-card agreements, is eight years under MCA 27-2-202, which is one of the longest in the country. Oral contracts have a five-year limit. The clock generally starts running from the date of last payment or the date of default, depending on the contract terms. Once the statute has run, the debt becomes time-barred and you have a complete defense to a lawsuit, but the burden is on you to raise it as an affirmative defense in your answer. A time-barred debt does not disappear and a collector can still ask you to pay voluntarily, but they cannot lawfully sue, threaten to sue, or imply that legal action is available. If you are unsure of the date of last payment, request itemized account records under FDCPA validation rules and review your credit report to find the charge-off date.

What can a collector take from my paycheck or bank account in Montana?

Montana follows the federal Consumer Credit Protection Act cap on wage garnishment: a creditor with a judgment can take the lesser of 25 percent of your disposable earnings or the amount by which your weekly disposable earnings exceed 30 times the federal minimum wage. Disposable earnings means what is left after legally required deductions such as taxes and Social Security. Certain income is fully exempt from garnishment, including Social Security, SSI, VA benefits, most retirement and pension payments, unemployment, and workers' compensation. If a collector levies your bank account and exempt federal benefits are deposited there, the bank is required under federal rule 31 CFR 212 to protect two months of those deposits automatically. You can also file an exemption claim with the court to release frozen funds. Montana's homestead exemption protects up to $400,000 of equity in your primary residence from most judgment liens.

Can I be arrested for not paying a debt in Montana?

No. Montana does not have debtors' prisons and you cannot be jailed for failing to pay a consumer debt. Any collector who threatens arrest, criminal charges, or jail time is violating both the federal FDCPA (15 U.S.C. § 1692e) and the Montana Consumer Protection Act. That said, there is a real risk people confuse: if a court orders you to appear for a debtor's exam or post-judgment discovery and you ignore the order, the judge can issue a civil bench warrant for failing to appear, not for owing the debt. The fix is simple: open your mail, respond to court papers, and show up to any scheduled hearing or exam. If you get a threatening call mentioning warrants or criminal charges before any lawsuit has been filed, document the call, save voicemails, and report it to the Montana Office of Consumer Protection and to the CFPB. Those threats are textbook FDCPA violations and they often signal a scam.

What does the Montana Consumer Protection Act add on top of the federal FDCPA?

The federal Fair Debt Collection Practices Act covers third-party collectors and debt buyers but does not directly reach the original creditor. The Montana Consumer Protection Act, MCA 30-14-101 et seq., is broader: it prohibits unfair, deceptive, or unconscionable acts in trade or commerce and applies to original creditors as well as collectors. Remedies under the MCPA include actual damages, attorney fees, and treble damages for willful violations. The Office of Consumer Protection within the Department of Justice enforces the Act and accepts complaints. Practical use looks like this: if a national bank or a hospital billing department engages in misleading collection conduct, you may not have an FDCPA claim because they are the original creditor, but you may have an MCPA claim. The combination of FDCPA against the collector and MCPA against the original creditor or debt buyer creates real settlement leverage.