JP Morgan Chase (“CHASE”) has reached a $100 million settlement with the California Attorney General’s office to resolve a complaint alleging CHASE engaged in unlawful and unfair debt collection practices. Under the settlement, CHASE will pay $50 million in restitution to consumers nationwide, with an estimated $10 million of that going to California customers and California service members, some of whom were on active duty when CHASE obtained illegal default judgments against them.
The complaint, filed by the California Attorney General in May 2013, alleges CHASE operated a debt collection mill and inappropriately sued tens of thousands of California consumers. The agency’s investigation into CHASE’s debt collection practices revealed that between 2009 and 2013, CHASE filed more than 125,000 credit card collection lawsuits against California consumers, relying on illegally robo-signed sworn documents, and provided an additional 30,000 robo-signed sworn statements in support of lawsuits filed against California consumers by third party debt collectors. CHASE also committed systematic calculation errors regarding the amounts owed, and sold debts to third party debt collectors that included accounts that were inaccurate, settled, discharged in bankruptcy, not owed, or otherwise not collectable.
Under the judgment, CHASE must document and confirm debts before filing credit card collection lawsuits or selling credit card debts to debt collectors. They are barred from robo-signing documents, selling certain debts, and must also prohibit debt buyers from reselling credit card debts owed to CHASE. CHASE will also pay $50 million in penalties and other payments to California through the Attorney General’s office.
Check out CHASE’s BCA report for their rating, more information on the actions taken by the California Attorney General’s office, other agency lawsuits, and to read consumer complaints. BCA has a helpful resource guide for consumers on “How To Deal With a Collection Agency” with tips and informative information.
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About Business Consumer Alliance
Business Consumer Alliance (BCA) is a non-profit company that started in 1928. The broad purpose of BCA is to promote business self-regulation. BCA's mission is achieved by assisting consumers in resolving complaints with businesses and using that complaint information, along with other relevant information such as customer reviews, to forecast business reliability. With community support, BCA can identify trustworthy and ethical businesses and warn the public to avoid unscrupulous businesses whose purpose is to defraud the marketplace. BCA also helps businesses promote themselves by providing services and tools to protect their business and reach out to their customers. BCA obtains its funding from member businesses who support the mission and purpose of the organization and who agree to abide by high standards of ethical business practices.