State of Minnesota
More about
Attorney General
Lori Swanson


Minnesota Attorney General's Office

1400 Bremer Tower
445 Minnesota Street
St. Paul, MN 55101

(651) 296-3353
(800) 657-3787

M - F 8 am - 5 pm

TTY:(651) 297-7206
TTY:(800) 366-4812

Press Release

Wednesday, October 30, 2013


ATTORNEY GENERAL LORI SWANSON SUES FLORIDA COMPANY FOR CREATING MANUFACTURED AFFIDAVITS TO AID IN COLLECTION OF OVERDRAFT DEBT PURCHASED FROM LARGE BANKS
Lawsuit Seeks to Protect the Integrity of the Legal System

Minnesota Attorney General Lori Swanson today filed a lawsuit against a Florida company that purchased millions of charged-off customer accounts from large banks, and then manufactured affidavits to aid in the collection of those accounts from individuals and businesses.

“This lawsuit is about protecting the integrity of the legal system,” said Attorney General Swanson.  “Because these affidavits were resold to other debt buyers, we need the involvement of the court to contain their usage.”

United Credit Recovery, LLC (“UCR”) touts itself as the nation’s largest buyer of overdraft debt.  UCR, formed in 2007, purchased for a few cents on the dollar electronic portfolios containing accounts of hundreds of thousands of individuals and small businesses that allegedly owed overdraft fees and balances to large banks, including Wells Fargo, US Bank, Bank of America, Fifth Third Bank, and Huntington National Bank.  In 2010, the average overdraft fee was $35, and banks impose smaller daily or periodic fees for each period in which an account is in arrears.  Banks eventually charge-off such fees and balances and in some cases may bundle hundreds of thousands of accounts together and sell the charged-off accounts to debt buyers like UCR.  In some cases, bank fees may constitute a significant portion of the debt that is sold.

The lawsuit alleges that UCR created on a mass scale “cut and pasted” affidavits that falsely appeared to have been sworn to and signed by officers of the original banks and notarized, and that bear the logo of the banks.  While made to appear as if they were individually and personally signed and sworn to by the bank officers before a notary, the affidavits were actually created using computer software that simply cut and pasted into an affidavit template a bank officer’s signature and notary from a different document.  UCR then sold the affidavits to other debt buyers.  The affidavits were then used to aid in the collection of the alleged customer debt, directly with consumers and through presentation to courts, both by UCR in some cases and more frequently by subsequent debt buyers to which UCR resold the debt and affidavits.  In one case, UCR created about 1,600 affidavits involving Minnesota customers and bearing the identical pasted-in April 29, 2008 signature of a US Bank officer whose signature was supposedly witnessed by a notary on March 19, 2008—over a month before the officer supposedly signed the affidavit.

UCR paid US Bank approximately $31 million to purchase overdraft debt with an estimated face value of $820 million between 2007 and 2011, or less than four cents on the dollar.  UCR paid Wells Fargo approximately $19 million to purchase overdraft debt with an estimated face value of more than $700 million between 2010 and 2012, or less than three cents on the dollar.  Both US Bank and Wells Fargo informed the Attorney General’s Office that they stopped selling overdraft debt to debt buyers last year.  Last month, Wells Fargo sued UCR in federal court in Florida over UCR’s creation, use, and dissemination of the affidavits.

This is the second lawsuit filed by the Attorney General’s Office against a debt buyer over sworn affidavits used to substantiate debts.  In May, 2011 the Attorney General sued Midland Funding, LCC alleging that its employees “robo-signed” affidavits to be used in court without reading the affidavits or without personal knowledge of their contents.  The lawsuit was settled in December, 2012. 

Earlier this year, the Minnesota Legislature—at the urging of the Attorney General—enacted legislation to require debt buyers seeking default judgments in court to substantiate through admissible evidence that they are suing the right person in the right amount and that the person has been notified of the lawsuit.  The law became effective on September 1, 2013.

The State’s lawsuit was filed in Hennepin County District Court.  It seeks a court order to enjoin UCR from creating, using, or reselling the manufactured affidavits, to identify all other debt buyers to which it sold the affidavits, and to use its best efforts to retrieve the affidavits it sold to others.

Consumers who have questions about debt collection or debt buyers may visit the Attorney General’s website at www.ag.state.mn.us, and look at the publications Debt Buyers and Debt Collection

People may report complaints about UCR to the Minnesota Attorney General’s Office by calling (651) 296‑3353 or (800) 657‑3787.  Individuals may also download a Complaint Form from the Attorney General’s Office website by clicking here and mail the completed form to the Attorney General’s Office at: 1400 Bremer Tower, 445 Minnesota Street, St. Paul, MN 55101‑2131. 

-30-