Haven’t seen this anywhere.

San Diego-based Encore Capital Group, which collects on bad credit card debts, has disclosed that it is the subject of a state investigation:

On January 6, 2010, the Office of the Attorney General of the State of California, the “California Attorney General,” issued a subpoena to us 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. [an Encore subsidiary] and Affiliated Persons and Entities” concerning our debt collection practices and related topics. We intend to cooperate fully with the California Attorney General in response to this subpoena, subject to applicable law.

The Federal Trade Commission has also ordered Encore to submit information about its practices. “Consumers have reported that debt collectors frequently try to collect from the wrong consumers or the wrong amounts, or both,” the FTC reports. Encore is one of the nine biggest consumer debt buyers that collectively buy 75 percent of all consumer debt sold in the United States.

Business at Encore, as you might expect, is good. Net income in 2009 was $33 million up 238 percent from $13 million the previous year.

Encore has several strategies to collect on bad credit card debts, relying principally on a network of lawyers in the United States and a call center in Gurgaon, India and elsewhere.

It costs Encore about 50 cents for every dollar it recovers.  Last year it collected nearly half a billion dollars.