JPMorgan Chase To Pay $136M To Close Credit Card Debt Collection Probes [UPDATED]
If you thought regulators were done with probing JPMorgan Chase’s credit card business after it was hit with a huge $389 million settlement over sketchy credit card practices ,think again. Multiple news reports claim the bank is now agreeing to pay out at least another $125 million to close both state and federal investigations into its questionable credit card debt collection operations.
Reuters was first to report that 47 states and the District of Columbia will end up splitting around $95 million of that total, with the federal Consumer Financial Protection Bureau receiving the rest. Around $50 million of the total settlement will be paid out to consumers.
At issue is Chase’s alleged over-eagerness to collect on credit card debt. The bank is accused of using methods — like “robosigning,” wherein someone merely
signs off on documents without properly reviewing them — that expedite the process but often result in incomplete or inaccurate collections actions.
The Wall Street Journal reports that Chase ceased filing credit card debt lawsuits in 2011 and hasn’t restarted.
You’ll note that the reported settlement doesn’t include all 50 states. Reuters says that neither California nor Mississippi are part of the deal, as both states have separate, pending litigation against Chase on similar claims.
In 2013, the state of California sued Chase for allegedly operating a “debt collection mill” that improperly sued more than 100,000 of the state’s residents over their credit card bills.
Mississippi filed a similar lawsuit against the bank later that year, alleging that a chaotic and high-pressure atmosphere at Chase led to widespread errors in debt collection actions.Source: consumerist.com