Following Encore Capital Groups announcement that it entered into a proposed $5.2 million settlement to resolve some consumer allegations and still pending investigations by Attorney Generals of the States of California and Texas an investigation on behalf of current long term investors in Encore Capital Group, Inc. (NASDAQ:ECPG) over possible breaches of fiduciary duties by certain Encore Capital Group officers and directors was announced.

The investigation by a law firm concerns whether certain officers and directors at Encore Capital Group, Inc breached their fiduciary duties and can be held liable for any wrongdoing.

Encore Capital Group, Inc. and rival debt-collection firms buy delinquent credit-card obligations and other loans in large batches, sometimes filing lawsuits to recover the money. Encore Capital Group, Inc is reportedly the largest publicly traded debt-buying firm by revenue in the U.S. Encore Capital Groups 12months Total Revenue increased from $254.01 in 2007 to $381.31million in 2010. In 2010, Encore Capital Group collected $266.7 million through lawsuits, up 15% from $232.7 million in 2009. The number of suits filed against borrowers rose 27% to 425,000 in 2010 from 334,000 in 2009. Its Net Income rose from $12.23 in 2007 to $49.05million in 2010. Shares of Encore Capital Group, Inc. traded during 2006 as low as $9.26 and increased to as high as $13.81 in September 08. Then ECPG shares fell to as low as $3.10 in March 09 but since then increased to as high as $27.21 per share on February 18, 2011.

But in 2008 a consumer filed a lawsuit in the United States District Court for the Northern District of Ohio Western Division, against the Encore Capital Group subsidiaries Midland Credit Management, Inc. and Midland Funding LLC alleging that their business practices violated consumers rights under the Fair Debt Collection Practices Act (FDCPA) and the Ohio Consumer Sales Practices Act.
While Encore Capital Group, Inc. (NASDAQ:ECPG) denied the claims it said the company reached on Feb. 10, 2011 an agreement in principal to settle this lawsuit on a national class basis for approximately $5.2 million, subject to entering into a definitive settlement agreement and obtaining court approval after notice to the class.
On November 2, 2010 and December 17, 2010 two national class actions were filed in the United States District Court for the Southern District of California. The plaintiffs allege that certain Encore Capital Group subsidiaries violated the Telephone Consumer Protection Act (TCPA) by calling consumers cellular phones without their prior express consent.
Encore Capital Group, Inc said besides those consumer lawsuits there are a number of other lawsuits, claims and counterclaims pending or threatened the company.
In addition so Encore Capital Group on December 16, 2009, the Federal Trade Commission (FTC) issued an order directing Encore Capital Group as one of nine companies to submit information about its practices in buying and collecting consumer debt, which Encore Capital Group said the FTC intends to use for a study of the debt-buying industry.
On January 6, 2010, the Office of the Attorney General of the State of California, the California Attorney General, issued a subpoena to Encore Capital Group to answer interrogatories and to produce documents in a proceeding entitled In the Matter of the Investigation of Encore Capital Group, Inc., Midland Credit Management, Inc. and Affiliated Persons and Entities concerning its debt collection practices and related topics.
On January 12, 2011, the Office of the Attorney General of the State of Texas issued a civil investigative demand against Encore Capital Group to produce documents in an investigation of its methods of collecting consumer debts in the State of Texas and related topics.