Maryland financial regulators said Friday that they have suspended the debt-collection licenses of two affiliated companies and ordered them to stop attempting to collect on consumer debts.

The state Department of Labor, Licensing and Regulation said it has "found grounds to allege" that LVNV Funding and Resurgent Capital Services violated several debt-collection laws. The companies have collectively filed more than 27,000 cases in Maryland courts over the past six years to seek judgments on old debts, including defaulted credit-card accounts.

A variety of companies buy consumer debts and then sue, often — the state contends — with little evidence to prove they have the right to collect. Maryland's highest court voted in September to make clear that more documentation is required from debt buyers, rules that will go into effect Jan. 1.

The state labor department said Friday that LVNV and Resurgent Capital's violations include filing "false, deceptive or deficient affidavits" in their court cases, misrepresenting the amount owed and collecting unauthorized attorney fees.

Luke Umstetter, senior corporate counsel for Resurgent Capital, said the company its affiliates — including LVNV — work hard "to comply with both the letter and spirit of all applicable laws and regulations."

"Given our efforts to operate in a fair, ethical and sensitive manner, we are very disappointed with any allegations to the contrary and look forward to resolving this matter with the state of Maryland as expeditiously as possible," he said.

The companies have a right to a hearing before the state decides whether to make the license suspension final.

In September LVNV settled a class-action lawsuit by agreeing to forgive about $10 million in debt it had tried to collect from 3,500 Maryland consumers. A key part of the suit was that the company got its collections license after filing thousands of cases here. LVNV did not admit any wrongdoing.

jhopkins@baltsun.com

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