{{Short description|Debt collection firm}}
{{Infobox company | name = Sherman Financial Group | logo = | type = Private | industry = Debt collection | founded = {{Start date and age|1998}} | founders = Ben Navarro and Brett Hildebrand | defunct = | fate = | successor = | hq_location_city = Charleston, South Carolina | hq_location_country = United States<ref name="WSJdebt"/> | area_served = United States | key_people = | products = | services = Invest in debt and debt collection | num_employees = | num_employees_year = | subsid = Credit One Bank | website = }}
'''Sherman Financial Group''' is an American private investment firm and the parent company of Credit One Bank. Established in 1998, the firm is headquartered in Charleston, South Carolina.
While the firm historically invested in distressed consumer assets, ''Forbes'' reported in December 2025 that Sherman had divested its debt purchasing subsidiary, Resurgent Capital Services, and currently focuses on banking and global investment operations.<ref name=":0">{{Cite news |last=Kauflin |first=Jeff |title=Why Debt Collectors Have Declared Open Season On Consumers |url=https://www.forbes.com/sites/jeffkauflin/2025/12/15/why-debt-collectors-have-declared-open-season-on-consumers/ |access-date=2026-01-15 |work=Forbes |language=en}}</ref> It has been reported that the company had regularly increased its volume of debt-collection lawsuits through notable economic downturns, including the 2008 financial crisis and the COVID-19 pandemic.<ref name="WSJdebt"/> It discloses minimal data about its financial results and operations.<ref name="WSJdebt"/>
==History== Sherman Financial Group was co-founded by Ben Navarro and Brett Hildebrand in 1998,<ref name="strange">{{cite news |last=Surane |first=Jennifer |date=December 5, 2017 |title=The Strange Case of the Look-Alike Credit Cards |url=https://www.bloomberg.com/news/articles/2017-12-05/the-strange-case-of-the-look-alike-credit-cards |url-access=subscription |url-status=live |archive-url=https://web.archive.org/web/20191209223831/https://www.bloomberg.com/news/articles/2017-12-05/the-strange-case-of-the-look-alike-credit-cards |archive-date=December 9, 2019 |work=Bloomberg News}}</ref><ref>{{cite web |title=Brett Hildebrand |url=https://www.forbes.com/profile/brett-hildebrand |website=Forbes}}</ref> who named the company after Navarro's dog.<ref name="WSJdebt"/> The company began its operations through the purchasing of distressed debts from other firms.<ref name="WSJdebt"/> Sherman received backing from investors, selling 91% of the firm to two insurance companies (one of which was Enhance Financial Services) for $40 million. The funding allowed Sherman to purchase larger portfolios of debt, which were analyzed internally by computer systems to efficiently collect on older loans.<ref name="WSJdebt"/> The company owns multiple subsidiaries, and at one point, its former debt-collection wing, Resurgent.<ref name="WSJdebt"/>
In 2005, Sherman acquired First National Bank of Marin and renamed it Credit One Bank. It is now a major credit card issuer, offering a range of cards, including some for subprime borrowers, through Visa, American Express, and Mastercard.<ref>{{cite web | url=https://www.occ.gov/static/cra/craeval/Nov07/20291.pdf |title=Community Reinvestment Act Performance Evaluation |archive-url=https://web.archive.org/web/20230808203041/https://www.occ.gov/static/cra/craeval/Nov07/20291.pdf | archive-date=August 8, 2023 |website=Office of the Comptroller of the Currency|url-status=live}}</ref> Through Credit One Bank's offering of high-interest credit cards to consumers with weak credit, when a customer defaults, Sherman-based entities attempted to collect on that debt.<ref name="WSJdebt"/>
From Sherman's inception to 2006, the company recovered more than $3.8 billion in debts.<ref name="WSJdebt"/>
According to the Nilson Report, between 2005 and 2009, Sherman Financial Group was the biggest buyer of defaulted credit-card debt in the United States.<ref name="WSJdebt"/>
In 2009, Sherman's revenue totaled $1.2 billion. In that same year, Navarro and his partners bought out the company's longtime investors, two insurance companies, and they took the company private.<ref name="WSJdebt"/>
In December 2021, Sherman Financial Group sold off its ownership percentage of Kroll Bond Rating Agency, a credit rating agency, for $900 million.<ref>{{cite web |last1=Beltran |first1=Luisa |title=Parthenon Capital Scoops Up the Ratings Company KBRA for $900 Million |url=https://www.barrons.com/articles/parthenon-capital-kroll-ratings-kbra-51639433534 |website=Barron's |date=December 13, 2021}}</ref>
By 2025, the company had shifted its focus away from debt collection operations. In December 2025, media reports confirmed that Sherman Financial Group had sold its ownership of Resurgent Capital Services.<ref name=":0" />
===Litigation=== In 2011, the state of Maryland sued Sherman Financial Group's primary debt-collection subsidiaries, alleging that they were unlicensed to collect on debt in the state. The subsidiaries had filed numerous lawsuits, which according to state regulators, "contained false, deceptive, or deviant complaints and supporting affidavits". The company settled the claim in 2012 without admitting wrongdoing, paying a penalty of $1 million and issuing credits of $3.8 million to Maryland-based customers.<ref name="WSJdebt"/>
In 2014, the Attorney General of New York obtained a settlement against Sherman Financial Group<ref name="WSJdebt">{{Cite web |last=Scheck |first=Shane Shifflett and Justin |date=2021-04-07 |title=Most Big Debt Collectors Backed Off During the Pandemic. One Pressed Ahead. |url=https://www.wsj.com/finance/most-big-debt-collectors-backed-off-during-the-pandemic-one-pressed-ahead-11617804180 |access-date=2025-05-30 |website=WSJ |language=en-US|url-access=subscription}}</ref> and the PRA Group "for repeatedly bringing improper debt collection actions against New York consumers."<ref name="attgennypr2014">{{cite press release | publisher=New York Attorney General | date=8 May 2014 | title=A.G. Schneiderman Announces Settlements with Two Major Consumer Debt Buyers for Unlawful Debt Collection Actions for Years, Portfolio Recovery Associates and Sherman Financial Group Obtained Judgments against New York Consumers Based upon Untimely Claims Schneiderman: Debt Collectors Must Abide by Same Rules as the Rest of Us | url=http://www.highbeam.com/doc/1G1-367404442.html | archive-url=https://web.archive.org/web/20150329162303/http://www.highbeam.com/doc/1G1-367404442.html | url-status=dead | archive-date=29 March 2015 }}</ref> The case involved uncontested default judgments levied against defendants who failed to respond to suits brought the groups against them.<ref name="attgennypr2014" /> The settlement required the abandonment of claims against debtors, changes in collection practices, and a civil fine.<ref name="attgennypr2014" />
Through 2019 and 2020, Sherman filed roughly 1 million debt-collection lawsuits throughout 5 jurisdictions, including New York, Wisconsin, Maryland, Missouri, and Harris County, Texas. In those jurisdictions, Sherman was responsible for 12% of debt lawsuits.<ref name="WSJdebt"/> Sherman also owns LVNV, a debt-purchasing firm, who filed 2,700 lawsuits in the state of Maryland in August 2020.<ref>{{cite web |last1=Kiel |first1=Paul |last2=Ernsthausen |first2=Jeff |title=Debt Collectors Have Made a Fortune This Year. Now They're Coming for More. |url=https://www.propublica.org/article/debt-collectors-have-made-a-fortune-this-year-now-theyre-coming-for-more |website=Propublica |date=October 5, 2020}}</ref>
In June 2022, a bankruptcy judge found Credit One Bank liable to roughly 288,000 credit card customers for attempting to collect debts after such debts were discharged via bankruptcies. In this lawsuit, the judge stated that Credit One Bank had misrepresented its relationship with Sherman Financial Group, amongst other findings.<ref>{{cite news| last1= Randles| first1= Jonathan| last2= Matsuda| first2= Akiko| title= Credit-Card Issuer Credit One Rebuked in Debt-Reporting Lawsuit| url = https://www.wsj.com/amp/articles/credit-card-issuer-credit-one-rebuked-in-debt-reporting-lawsuit-11654768801| work= The Wall Street Journal| date= June 9, 2022| url-access= subscription}}</ref>
== References == {{reflist}}
Category:Debt collection Category:1998 establishments in South Carolina Category:Companies based in Charleston, South Carolina