A California collection agency has agreed to release West Virginia consumers from $3.5 million in credit card debt turned over to it by Cross Country Bank. It's the latest skirmish in a long-running feud involving West Virginia Attorney General Darrel McGraw and Cross Country.
McGraw said that Midland Credit Management, Inc. of San Diego purchased about 3,500 charged-off accounts from Cross Country Bank, based in Wilmington, Delaware.
Attorney General McGraws office began investigating Midland in 2004 after receiving complaints from West Virginia consumers who had been sued or contacted by Midland to collect debts originally owed to Cross Country Bank.
Cross Country Bank is a credit card bank that markets high interest credit cards to consumers with bad credit histories. McGraws office settled its lawsuit against Cross County Bank on June 21, 2005.
McGraws office questioned the propriety of collecting the accounts based upon the same concerns that led to his lawsuit against Cross Country Bank.
As a result of these concerns, the Attorney General requested that Midland close all of the accounts with a zero balance and notify credit bureaus to delete all references to the account from consumers credit records. Midland agreed to do so in the settlement announced by McGraws office.
"I commend Midland for promptly doing the right thing after we brought our concerns about these accounts to its attention," McGraw said. "As a result of our agreement with Midland, approximately 3,536 West Virginia consumers have been relieved of all further obligations to pay $3,548,539.80 in credit card debt. Because the accounts have also been deleted from credit records, consumers will no longer be denied access to new credit as a result of these accounts.
