Minnesota Attorney General Lori Swanson has filed a lawsuit against a junk-debt buyer, Bradstreet & Associates, accusing that firm of charging an inflated interest of 22% on debts for overdrawn bank accounts that may only charge 6% interest under Minnesota law.
Companies have the right to collect legitimate debt. But they shouldn't be charging peoeple for interest they don't owe." Minnesota Attorney General Lori Swanson
Bradstreet & Associates spent $646,000 to purchase $9 million of overdrawn bank accounts from U.S. Bank and Wells Fargo. The accounts were purchased from a Florida debt buyer for 3 to 7 cents on the dollar.
Bradstreet filed lawsuits in Minnesota misrepresenting the maximum interest rate that could be charged for these debts and in most cases obtained default judgments when consummers failed to respond to the lawsuit.
How did Bradstreet & Associates decide to charge 22% interest instead of the legal maximum of 6%? The company has refused to comment on the lawsuit so we can only speculate.