LVNV Funding LLC recently settled a class action suit in Maryland that focused on the firm’s license status in the state. The suit alleged that the debt buyer was not properly licensed to file debt collection suits in Maryland courts.

But the attorney representing LVNV said that the firm did not admit to any wrongdoing, believing that it was properly licensed.

“[LVNV has] decided to settle this matter with the plaintiffs rather than face protracted litigation with an unknown outcome,” said Ronald S. Canter in a statement provided to

The settlement calls for LVNV to pay $2,000 each to the two named lead plaintiffs and make an additional $150,000 payment to the class attorneys to cover legal fees. LVNV also agreed to stop legal collection action against the roughly 3,500 members of the class.

The case highlighted a confusing licensing requirement in Maryland with regard to debt buyers filing collection suits on debt they own.

“In interpreting an amended statutory provision, LVNV relied on specific guidance from Maryland’s licensing agency, legal counsel, and trade organizations in forming the belief that they did not need to obtain a debt collection license in Maryland,” the company said.  “Unfortunately, later interpretation of the statutory language by other parties has called this into question.”

The company reiterated that it decided to settle rather than face an uncertain interpretation in the court that would ultimately rule on the case.

Uncertainty was created when a Maryland licensing official entered a sworn statement into the record of a similar civil case a couple of years ago which noted that debt buyers filing collection lawsuits did need to be licensed as collection agencies in the state. The statement seemed to contradict an advisory letter issued by the same body in 2007.

Barbara Sinsley, Counsel to debt buying association DBA International, noted that Maryland’s initial letter came in response to a query by her group. In the letter, Maryland’s Department of Labor, Licensing and Regulation explicitly noted that a passive debt buyer not involved in the collection of debts was not required to obtain a collection agency license, provided they used properly-licensed collectors in the state. As such, DBA advised members along those lines.

But when the department seemed to come down on the other side of the matter just two years later, DBA was forced to amend its recommendations. “We now advise debt buyers to get licensed in the state of Maryland,” said Sinsley.

She also noted that other states could take a cue here and stick to consistent regulation. “All we ask is that regulators do what they say they are going to do,” said Sinsley. “And if you decide to change direction, please publish your new position.”

The story was initially reported Friday by The Baltimore Sun. The paper asserted that LVNV was on the hook for $2,000 to each class member. But Canter set the record straight Saturday.

“The statement that LVNV is paying $7 million to 3500 debtors under the settlement agreement is false,” Canter said. “The settlement only requires LVNV to pay the named Plaintiffs $2,000 each for a total of $4,000 plus $150,000 to the Plaintiff’s counsel for attorney fees.”

The paper has since updated its story.

Next Article: Doing it Wrong with Clip Art