Lawfirm Wites & Kapetan has a press release on the wires that seeks to answer the question: Where have all the Chase Bank credit card accounts gone?
Once upon a time — before 2010, say — Chase sold off their bad credit card accounts to debt buyers like it was their job. Usually, these were bundled and sold “as is,” according to Alex Kapetan, which could present problems down the line if the accounts were never reviewed for accuracy. A collection agency could find itself trying “to collect on an amount that may not be accurate or on a judgment that does not exist.
The name Linda Almonte might ring a bell for some of you out there. She was a Chase employee who was fired for objecting to the sale of $200 million in legal judgments. Alamonte alleged that close to half the accounts in that $200 million bundle either lacked adequate documentation or were for the wrong amount. Chase didn’t like her allegations. Alamonte filed suit as a whistleblower, and Chase was in a lot of hot water over the whole deal.
They’ve also become very skittish about selling bad accounts, according to Wites & Kapetan. Proof of this can be found in a news story that ran last month: JPM Chase Quietly Halts Suits Over Consumer Debts.
The most interesting part of the Wites & Kapetan release, for my money, is at the end:
“Wites & Kapetan has found that the threat of litigation is a well-known collection tactic used to influence a consumer to try to resolve their debts, the absence of which could explain Chase’s recent decline in recoveries. Both, Mr. Kapetan and Steven Canter report that Chase has dismissed cases against his firm’s clients, and that other cases brought by Chase are at a stand still. He likened the situation to that of robo-signing in the mortgage foreclosure industry, explaining that ‘Just as a bank must prove with admissible evidence that it actually owns the mortgage upon which it seeks to foreclose, a credit card company must prove that it owns the account and the debt in order to seek to collect from the consumer.’”