Sued by Encore Capital Group in South Carolina? 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 South Carolina, the statute of limitations for credit card debt is 3 years. If your last payment was more than 3 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 South Carolina 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.

South Carolina Consumer Protection Code

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

South Carolina Court System

Magistrate court handles cases up to $7,500. Circuit court for larger amounts. Filing fees in South Carolina typically range $40-$200.

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 South Carolina?

30 days from service.

What is the SOL in South Carolina?

3 years for all contract types — one of the shortest in the country.

Can they garnish my wages in SC?

No. South Carolina prohibits wage garnishment for consumer debts.

What makes SC favorable for debt defense?

The combination of a 3-year SOL and no wage garnishment makes South Carolina one of the most consumer-friendly states.

Can a credit card company garnish my wages in South Carolina?

Generally no. South Carolina is one of a small number of states where wage garnishment for ordinary consumer debts is not available to private creditors. Under S.C. Code Ann. § 15-39-410 and related provisions, private creditors like credit card companies, medical providers, and debt buyers cannot garnish your paycheck in South Carolina to satisfy a judgment, even after they have sued and won. The exceptions are narrow: child support, alimony, federal and state taxes, federal student loans, and a few other government-related debts can still result in wage garnishment. If a private debt collector threatens to garnish your wages over a credit card or medical debt in South Carolina, that threat itself may violate the federal FDCPA and the South Carolina Consumer Protection Code because they cannot lawfully follow through. A judgment can still result in bank account levies, real property liens, and execution on non-exempt personal property, so a judgment is still serious.

What is the South Carolina Consumer Protection Code and how does it apply to debt collectors?

The South Carolina Consumer Protection Code at S.C. Code Ann. § 37-1-101 et seq. is a comprehensive statute regulating consumer credit transactions in the state. Article 5, S.C. Code Ann. § 37-5-101 et seq., governs creditor remedies and collection conduct. Section 37-5-108 prohibits unconscionable conduct in collecting debts, including a list of practices similar to but broader than the federal FDCPA. The Code is administered by the South Carolina Department of Consumer Affairs, which licenses many credit-related businesses and accepts complaints. Violations can trigger administrative action and a private right of action for actual damages and attorney fees. Because the Code applies to both creditors and collectors, it can reach conduct by the original bank or medical provider that the federal FDCPA cannot reach. Combining a Code claim with a federal FDCPA claim in a counterclaim against a debt buyer often produces faster and better settlements.

I was sued in South Carolina magistrate court. How does that work?

South Carolina magistrate courts have civil jurisdiction up to $7,500 under S.C. Code Ann. § 22-3-10. They are designed for relatively informal proceedings with simplified rules. When served, you will get a complaint and a notice telling you to file a written answer within 30 days, although the exact timing depends on how you were served. Do not skip the answer. If you fail to respond, the debt buyer will move for default judgment and the court will likely enter one without examining whether the buyer can actually prove the debt. Your answer can be short, denying the substantive allegations and listing defenses such as lack of standing, statute of limitations, and failure to attach the contract. Once your answer is on file, you can use limited discovery and prepare for trial. Many magistrates are sympathetic to self-represented defendants and will insist that a debt buyer produce real documentary proof. If you lose at the magistrate level, you have a right to appeal to Circuit Court for a do-over.

What is the statute of limitations on debt in South Carolina?

South Carolina applies a three-year statute of limitations to most contract and account actions under S.C. Code Ann. § 15-3-530. That is shorter than most states and a significant consumer protection. The clock generally starts on the date of the first missed payment that was never cured. Once three years have passed without a payment or written acknowledgment, the debt is generally time-barred. Making a partial payment or written acknowledgment of an old debt can restart the clock, so do not pay anything on an old debt without legal advice. For installment loans, courts sometimes apply the limitations period to each missed payment, although acceleration by the lender starts the full balance running. If you are sued in South Carolina on a debt that is more than three years past the last payment, raise the statute of limitations as an affirmative defense in your answer. South Carolina courts routinely dismiss time-barred debt buyer suits when the defense is properly raised.

How do I file a complaint against a debt collector with South Carolina Consumer Affairs?

The South Carolina Department of Consumer Affairs accepts written complaints against debt collectors at consumer.sc.gov or by phone at 800-922-1594. SCDCA licenses collection agencies and has authority under the Consumer Protection Code to investigate complaints, impose administrative penalties, and revoke licenses. To file an effective complaint, gather copies of any letters from the collector, recordings of phone calls if you have them, a log of dates and times of calls, and any documents showing the alleged debt. Submit the complaint online and follow up if you do not receive an acknowledgment within a few weeks. A regulatory complaint does not directly recover money for you, but a documented complaint history is valuable in private litigation and can prompt the collector to settle individual matters more reasonably. If the conduct rises to the level of an FDCPA or SCCPC violation, you can also pursue a private action for damages and attorney fees in addition to the regulatory complaint.