IN early March 2020, as Covid-19 swept across the nation, Horst Seibert was working at a South Florida assisted-living facility as a driver for its elderly residents. He earned just $12.88 an hour and was shocked when his paycheck was abruptly slashed by 25%. The culprit? A big debt collection company, San Diego-based Midland Credit Management, had begun garnishing his wages due to a $3,300 credit card balance he had neglected to pay. Years earlier, Midland purchased Seibert’s debt from Citibank, which had written off the charge. Midland sued Seibert in Florida, won a judgement and gained the legal right to deduct a portion of his earnings.

Seibert eventually struck a deal with Midland to go on a payment plan. But after making on-time monthly payments of $49 for two years, Midland increased his total remaining balance by $194 without explaining why. After another year of on-time payments, they increased it yet again, eventually raising his balance by a total of $1,571, according to Seibert. Despite repeated inquiries over several months, Midland failed to fix the apparent error or explain why it ever inflated his bill, and it stopped responding to Seibert’s questions.

“I felt helpless,” Seibert says today. “How am I going to correct this if these people don't respond?” In October, he filed a lawsuit against Midland. He’s representing himself because he doesn’t have enough money for an attorney. The company has since tried to get the case dismissed. Midland “does not concede any wrongdoing, other than at most an accounting mistake," its lawyer said in a legal filing.

Midland is facing a barrage of lawsuits from angry consumers. Nearly every working day, some distressed debtor files a case against the company in a federal court, claiming everything from inaccurate information placed in credit reports to a failure to stop contacting a debtholder. According to a lawsuit filed two months ago, Midland mistakenly sued a Tennessee resident for $212 even though he had already paid his debt–and even though it cost the company $405 just to file the lawsuit in the Western District of Tennessee. Midland is owned by debt buyer Encore Capital, which is led by 60-year-old CEO Ashish Masih, a former McKinsey consultant with a Wharton MBA.

The recent cases against Midland are part of a larger pattern of rising consumer complaints against the thousands of businesses that make up the $15 billion debt-collection industry. Over the past 11 months, consumers filed 253,000 complaints about collection companies to the Consumer Financial Protection Bureau (CFPB), up from 140,000 during the same period in 2024.

The complaints range from collectors failing to provide proof that a debt was owed to aggressively contacting “current and previous employers, relatives, friends, even acquaintances.” The potential for heavy-handed tactics and abuse is large–nearly one in four........

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