X0202 4 2007-08-24 0 0001084961 ENCORE CAPITAL GROUP INC ECPG 0001374566 MESDAG WILLEM 10100 SANTA MONICA BOULEVARD SUITE 925 LOS ANGELES CA 90067 1 0 1 0 0001374602 RED MOUNTAIN CAPITAL PARTNERS II, L.P. 10100 SANTA MONICA BOULEVARD SUITE 925 LOS ANGELES CA 90067 0 0 1 0 0001374600 RED MOUNTAIN CAPITAL PARTNERS III, L.P. 10100 SANTA MONICA BOULEVARD SUITE 925 LOS ANGELES CA 90067 0 0 1 0 0001374606 RMCP GP LLC 10100 SANTA MONICA BOULEVARD SUITE 925 LOS ANGELES CA 90067 0 0 1 0 0001374588 RED MOUNTAIN CAPITAL PARTNERS LLC 10100 SANTA MONICA BOULEVARD SUITE 925 LOS ANGELES CA 90067 0 0 1 0 0001374607 RED MOUNTAIN CAPITAL MANAGEMENT INC 10100 SANTA MONICA BOULEVARD SUITE 925 LOS ANGELES CA 90067 0 0 1 0 Common Stock 748009 I Through RMCP II (as defined below). Common Stock 2687053 I Through RMCP III (as defined below). Common Stock 2007-08-24 4 A 0 6900 0 A 6900 D These shares are held directly by Red Mountain Capital Partners II, L.P. ("RMCP II"). These shares are held directly by Red Mountain Capital Partners III, L.P. ("RMCP III"). On August 24, 2007, Encore Capital Group, Inc. ("Encore") granted 6,900 deferred issuance restricted stock units (the "RSUs") to Willem Mesdag under the Encore 2005 Stock Incentive Plan in connection with his service as a member of Encore's board of directors. Each RSU represents the right to receive one share of Encore common stock. The RSUs are subject to vesting. 50% of the RSUs will vest on September 23, 2008, and the remaining 50% will vest on August 23, 2009. The RSUs are held directly by Mr. Mesdag. This Form 4 is jointly filed by (i) RMCP II, (ii) RMCP III, (iii) RMCP GP LLC ("RMCP GP"), (iv) Red Mountain Capital Partners LLC ("RMCP LLC"), (v) Red Mountain Capital Management, Inc. ("RMCM"), and (vi) Mr. Mesdag. RMCP GP is the general partner of each of RMCP II and RMCP III. RMCP LLC is the managing member of RMCP GP. RMCM is the managing member of RMCP LLC. Mr. Mesdag is the president, sole executive officer, sole director and sole shareholder of RMCM. Mr. Mesdag is also a director of Encore. Each of the reporting persons hereunder disclaims beneficial ownership of the reported securities except to the extent of its or his pecuniary interest therein. In addition, RMCP II disclaims beneficial ownership of any securities held directly by RMCP III, and RMCP III disclaims beneficial ownership of any securities held directly by RMCP II. Each of RMCP II, RMCP III, RMCP GP, RMCP LLC and RMCM also disclaims beneficial ownership of any securities held directly by Mr. Mesdag. This Form 4 shall not be deemed to be an admission that any reporting person hereunder is the beneficial owner of any of the reported securities for purposes of Section 16 of the Securities Exchange Act of 1934, as amended, or for any other purpose. /s/ Willem Mesdag (on behalf of himself and each other reporting person hereunder) 2007-08-28