• Law Office of Christopher R. Chicoine

What is Encore Capital?

Updated: Mar 19

Encore Capital Group Inc. and its subsidiaries are collectively, one of the largest debt collectors in the United States. Its business model is to purchase pools of consumer debt receivables, typically from large banks, for collection and servicing of such debts. Most, if not all debt services and/or collected from Encore Capital originated from a different creditor. Encore Capital makes money by purchasing delinquent accounts for pennies on the dollar in comparison to the face amount of the debt purchased.

According to its website:

“Encore capital group is a Global specialty finance company with operations and investments across North America, Europe, Asia and Latin America. Through its subsidiaries around the globe, encore purchases or services portfolios of receivables from major banks, credit unions and utility providers…”

Encore Capital owns Midland Credit Management Inc.; Asset Acceptance Corporation (traded on Nasdaq as AACC); Atlantic Credit & Finance; and Cabot Financial (UK company). Collectively, Encore Capital and its subsidiaries comprise the largest debt buyer and/or debt collector in the United States (according to CFPB as of 2015).

Encore Capital is a publicly traded company on Nasdaq under the ticker symbol ECPG. IIt is based in San Diego, CA but has offices nationwide. It operates in 8 countries.

According to Encore Capital’s Form 10-K filed with the SEC, which is the company’s audited set of financial statements for the fiscal year ending December 31, 2020, Encore Capital generated $1.374 billion in revenue from its receivables portfolio, $115 million in servicing fees, and $212.5 million in net income.

A copy of this 10-K can be read here.

Moreover, in 2015, the consumer finance bureau and Encore Capital entered into a consent order for its debt collection practices. A copy of that consent order can be read here. Some of the findings include: Encore Capital bought debts it should have known to be inaccurate or that could not be legally enforced; Encore Capital bought debt from sellers without checking to make sure the debt the debts were accurate and enforceable; and Encore Capital engaged in misrepresentations or unlawful actions to pressure consumers into paying their debts.

As part of the consent order with the CFPB, Encore Capital agreed to: refund customers up to $42 million; cease collection on $125 million of its receivables portfolio; and pay a penalty to the CFPB of $10 million.

I will have a separate blog post and podcast on what to do outside of bankruptcy if you receive a debt collection letter from Encore Capital.

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