After reaching settlement agreements with 47 other states earlier this
year, JPMorgan Chase recently settled with the state of California to
the tune of $50 million. The settlement agreement states Chase used abusive
and illegal debt-collection practices to extract money from credit card
customers in the state. This deal is the final step in a lawsuit filed
by California Attorney General, Kamala Harris, in 2013. Harris says that
between 2009 and 2013, Chase sold settled debts to collectors, filed over
125,000 collections lawsuits against California residents (using “robo-signed”
documents) and miscalculated the debts owed by consumers.
Allegations also included that Chase sent threatening letters to consumers
and sought default judgments against active-duty military members who
were also part of the settlement agreement. Harris asserted that such
abusive debt-collection practices would not be tolerated in the state
of California, and that the settlement would provide relief to “tens
of thousands of Californians, including service members.”
Chase Agrees to Conditions Which Will Govern Debt Collections Practices
In addition to the state penalties which will be assessed against JPMorgan
Chase, the company will pay about $10 million to those California consumers
affected by unfair debt-collection practices. In California, as well as
in the other states which have settled with Chase, the bank has agreed
to conditions which will govern how it collects debts or sells debts to
outside collections. One of those conditions is that firms which purchase
Chase consumers’ defaulted credit card debts must have all the information
necessary to prove the debt actually exists.
Many consumers are unable to fight such debts in court because they are
unaware of their rights, even though the bank may have provided debt collectors
with incomplete or inaccurate information. Chase Bank, although paying
out millions in settlements across the United States, has admitted no
wrongdoing. In total, including the California settlement, Chase is on
the hook for more than $250 million so far. JPMorgan Chase will also pay
another $50 million in penalties to California as a means of settling
a 2013 lawsuit. Military members in the state of California will be reimbursed
in cases where Chase improperly obtained default judgments; the state
claims Chase neglected to check to see if customers were on active military
duty, yet swore they had done so.
Threats and Inaccurate Allegations
Apparently letters were sent to consumers which contained illegal threats
signed by attorneys who failed to review the allegations for accuracy.
These threats were made in violation of California’s Fair Debt Collection
Practices Act. As part of this settlement, Chase must permanently halt
collections attempts on more than 528,000 customer accounts. Chase must
also document and confirm debts prior to filing collection lawsuits or
selling consumers’ credit card debts to debt-collection companies.
Robo-signing court and other documents is also now prohibited.
Nevada Residents See Similar Agreement with Chase
The state of Nevada inked a similar settlement last summer with Chase.
Nevada residents were subjected to the same practices as consumers in
California, with settled debts being sold to debt collection agencies,
consumers being dunned for accounts which were not theirs, and even collection
for debts in the wrong amounts. Lawsuits filed against customers were
based on inaccurate documentation, prepared and “robo-signed,”
just as with those in California. Customers’ credit ratings were
damaged making it difficult for thousands of consumers to get a job, obtain
credit, qualify for a mortgage or even obtain insurance.
Protections for Consumers
Consumers are currently protected under the Federal Fair Debt Collection
Practices Act as well as fair Debt Collection Practices Acts in each state.
These Acts give consumers the right to request verification of a debt,
only be contacted between 8 in the morning and 9 at night, ask that all
communications between consumer and debt collector be stopped, not be
contacted at work and not be harassed by the debt collector. If your rights
in these areas have been violated, a consumer rights attorney in your
state can help you sue the debt collector for violating federal and state laws.
Contact Our National Consumer Protection Lawyers
If you have experienced a dispute with your financial institution and are
unable to reach a mutually agreeable resolution, it is imperative that
you seek legal representation immediately. Contact the national consumer
protection lawyers at Golomb & Honik, P.C. today at
1-800-355-3300 or 1-215-985-9177 or fill out our confidential
Contact Form. We have successfully fought credit card companies, banks, and financial
institutions and protected consumer rights for decades. Call us today
to review your case.
The national consumer protection lawyers at Golomb & Honik, P.C. have
successfully represented individuals in Philadelphia, Pennsylvania, New
Jersey, and throughout the United States.