Debt collector agrees to vacate $18M in improper claims in settlement with New York

Lifestyle and BudgetAssociated Press

A debt collection agency has agreed to waive nearly $18 million in improper judgments in a settlement with New York state.

The state attorney general's office announced the settlement with Encore Capital Group on Friday. The state says Encore obtained thousands of default judgments against consumers ordering them to pay debts after the state's statute of limitations had expired.

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As part of the settlement the San Diego-based company also agrees to change its collection practices and pay $675,000 in penalties and legal costs.

In New York, debt collectors have up to six years to file a lawsuit against a consumer. Despite that, the attorney general's office says Encore obtained more than 4,500 judgments for debts that were legally uncollectable.

A message left with Encore was not initially returned Friday.