Minnesota Attorney General Lori Swanson has filed suit against Edina-based Bradstreet and Associates, accusing the debt collection firm of charging up to 21.75 percent interest on consumer debt -- far more than the maximum 6 percent allowed under state law. Swanson said Bradstreet has bought $18 million of debt from U.S. Bank and Wells Fargo -- two of the biggest banks in the state -- since 2009. It has obtained court-ordered judgments against 2,300 Minnesota consumers, but as many as 16,000 state residents could be affected.
Many consumers have seen their debts increase because of Bradstreet's high interest rates. In one case, Jennifer Dahlke of Minneapolis had $2,073 worth of overdraft-related debt that ballooned into $4,312. Dahlke said that her overdraft debt originated with U.S. Bank and that she set up a payment plan with Bradstreet, making a total of $1,500 in payments for 15 months. Bradstreet allegedly refused to provide documentation of her payments and called her at work and at home to pursue the debt, which was still accruing interest at 21.75 percent interest. Bradstreet sued Dahlke and secured a judgment of $2,812 against her. "Companies have the right to collect legitimate debt, but they shouldn't charge people for interest that isn't owed, nor should they get courts to award judgments against people for interest that isn't owed," Swanson said. She added that consumers' contracts with U.S. Bank and Wells Fargo did not allow for interest on the overdraft debts. Her lawsuit seeks an injunction against Bradstreet and restitution for consumers involved.