California Sues JPMorgan Chase Over Debt Collection Lawsuits

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California Attorney General Kamala Harris Thursday announced that her office has filed an enforcement action against JPMorgan Chase & Co. alleging that the bank engaged in fraudulent and unlawful debt-collection practices against tens of thousands of Californians.

The suit alleges that Chase engaged in widespread robo-signing of court documents in debt collection cases, among other practices, to commit abuses against approximately 100,000 California credit card borrowers over at least a three-year period.

“Chase abused the judicial process and engaged in serious misconduct against California credit card borrowers,” Attorney General Harris said. “This enforcement action seeks to hold Chase accountable for systematically using illegal tactics to flood California’s courts with specious lawsuits against consumers. My office will demand a permanent halt to these practices and redress for borrowers who have been harmed.”

Harris alleged that from January 2008 through April 2011, Chase filed thousands of debt collection lawsuits every month in the State of California. The complaint against Chase alleges that, to maintain this pace, Chase employed unlawful practices as shortcuts to obtain judgments against California consumers with speed and ease that could not have been possible if Chase had adhered to the minimum substantive and procedural protections required by law.

The central issue is the use of affidavits to prove that the debt belonged to the consumer being sued, and the alleged practices employed by Chase to produce the documents. Chase allegedly robo-signed various litigation filings, including sworn documents, declarations, and verified complaints, without reviewing the relevant files or bank records or even reading the documents before signing.

The issue of robo-signing documents in debt collection lawsuits has been prominent among debt buyers for the past couple of years, and before that, among mortgage companies in foreclosure proceedings.

Chase has also faced similar questions before regarding its legal collection channel. Last year, a series of articles in American Banker detailed an investigation by the U.S. Office of the Comptroller of the Currency that looked into the bank’s affidavit process.

In addition to the improper legal documents allegations, Harris charged that Chase failed to properly serve notice of debt collection lawsuits against consumers while claiming they had been served as required by law.

Harris filed the suit in Los Angeles Superior Court. Read a copy of the complaint.

 

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Posted in Collection Law Firms, Collection Laws and Regulations, Credit Card Receivables, Credit Grantors, Featured Post .

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  • avatar Broadwayjoe says:

    Our company in business 32 years never a problem with our banking.
    Switched to Chase 5 years ago and again never a problem.
    April 2013 we get a letter from Chase they are closing our accounts because
    colllection agencies are on a list of industries Chase refuses to do business with.

    ” What goes around comes around “

  • avatar Commercial Guy says:

    Just offhand, I would expect this one to be not only very expensive for Chase, but that it will soon be followed by more of the same. More than 100,000 suits in the period between January 2008 and April 2011, 3 named defendants plus John Does 1-100 (everyone involved including the individuals who signed any of the declarations or affidavits). The relief requested is restitution of any monies gained through any of these practices, plus $2,500 from each defendant under 2 sections of the Business and Professions Code for each violation.

    My calculator just blew up.

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