Encore Capital Group Inc was accused by Minnesota of filing unverified affidavits in litigation to collect on consumer debt.
Attorney General Lori Swanson said Encore's Midland Funding LLC unit took shortcuts in trying to extract payments, often using false and unreliable mass-produced, 'robo-signed' affidavits as supposed proof that money was owed.
A spokesman for Encore had no immediate comment.
Encore shares fell as much as 10.3 percent on Monday. They were down $1.33, or 5.2 percent, at $24.30 in early afternoon trading on the Nasdaq.
(Reporting by Jonathan Stempel in New York, editing by Matthew Lewis)