New bill at Capitol would tighten rules for debt collectors

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New legislation backed by Minnesota's attorney general would create tougher requirements for debt collection companies operating in the state.

Attorney General Lori Swanson says too many companies that buy debts from creditors have flimsy information about what is owed by whom and sometimes wind up going after the wrong person. The new bill would require companies to show proof that they're suing the right person for the right amount of money when they go to court.

Last month Swanson's office reached an out of court settlement with one of the country's biggest debt buyers, Midland Funding. Swanson says in many of the 15,000 lawsuits Midland filed in Minnesota during a four-year period, the company targeted the wrong people for debt collection.

A higher-profile case came earlier last year, when Swanson took on Accretive Health Services over the tactics it was using to collect hospital bills. That led to a $2.5 million settlement and a ban on Accretive doing business in the state for at least two years.

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