The Consumer Financial Protection Bureau and 47 state attorneys general came down hard on JPMorgan Chase, who will pay $166 million to settle charges that it engaged in illegal debt collection activities for years, and must adhere to strict new debt collection rules, according to state and federal authorities. The bank will also refund at least $50 million to consumers and agree to permanently end collection activities on more than half a million accounts.
The Consumer Financial Protection Bureau and 47 state attorneys general joined in the enforcement action, which says Chase systematically broke collection rules from 2009-2013. The allegations include robo-signing court documents when the bank was in the midst of jamming courtrooms with debt collection cases — 100,000 alone in California courts, according to a lawsuit filed in 2013 by California Attorney General Kamala Harris
“Chase filed more than 528,000 debt collections lawsuits against consumers and provided more than 150,000 sworn statements to debt buyers for their collections lawsuits against consumers, often using robo-signed documents. In doing so, Chase systematically failed to prepare, review, and execute truthful statements as required by law,” the Consumer Financial Protection Bureau said. Chase is also accused of collecting on so-called zombie debts — accounts that were either already settled or too old to collect on. “Chase sold faulty and false debts to third-party collectors, including accounts with unlawfully obtained judgments, inaccurate balances, and paid-off balances,” the CFPB alleges. “Chase also sold debts that were owed by deceased borrowers.”
BIIA editorial comment: If you are in the debt collection or accounts receivable management business you better watch out. BIG Brother is watching you. If you are buying debt for collection purposes you better investigate the debt collection practices of the source of the debt.