JPMorgan Chase & Co. was sued by California over claims that the biggest U.S. credit-card lender pursued lawsuits against defaulted borrowers based on insufficient evidence.
From January 2008 to April 2011, JPMorgan filed more than 100,000 debt-collection lawsuits in California, taking illegal shortcuts to obtain judgments against consumers, Harris claims in the lawsuit filed yesterday in state court in Los Angeles.
The bank couldn’t have won the judgments so quickly if it had complied with minimum consumer protections under state law, according to the complaint. Harris said in a statement yesterday that the suit was filed to end “widespread, illegal robo-signing” of court filings without the review of relevant files or bank records.
“Chase abused the judicial process and engaged in serious misconduct against California credit-card borrowers,” Harris said in the statement. The lawsuit “seeks to hold Chase accountable for systematically using illegal tactics to flood California’s courts with specious lawsuits against consumers.”
Kristin Lemkau, a spokeswoman for New York-based JPMorgan, didn’t immediately yesterday to phone and e-mail messages seeking comment on the lawsuit.
According to the complaint, based on alleged violations of California’s unfair competition law, JPMorgan sent letters to consumers demanding payment of a balance due, claiming they may be liable for attorney’s fees, and threatening to garnish income and place liens on property.
The correspondence is signed by a lawyer, though no lawyer reviewed the consumer’s file to determine whether the claims and amounts due are correct, according to the suit.
The case is California v. JPMorgan Chase, BC508466, California Superior Court for the County of Los Angeles.