JPMorgan to Pay California $50 Million for Credit-Card Abuseby
Bank resolves California attorney general's claims in lawsuit
AG Harris says Chase is changing debt-collection practices
JPMorgan Chase & Co. agreed to pay California $50 million to settled claims the bank cheated tens of thousands of credit-card customers while collecting debts from them, California Attorney General Kamala Harris said.
Monday’s accord follows an announcement in July that JPMorgan would change its practices and pay $166 million to resolve claims and penalties by the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency and 47 states after regulators found that the bank used abusive tactics to collect debts. The company didn’t admit or deny wrongdoing in July.
Harris sued New York-based JPMorgan in May 2013, alleging that its Chase unit engaged in “widespread and illegal robo-signing” and other unlawful practices against credit-card borrowers. Chase, the biggest U.S. bank by assets, used the judicial system as a mill to obtain default judgments, according to the attorney general. The bank lost a bid last year to have the suit dismissed.
“Abusive and illegal debt-collection practices will not be tolerated in California,” Harris said in a statement. “This settlement provides real relief to tens of thousands of Californians, including service members, and prevents JPMorgan Chase from continuing these deceptive and illegal debt-collection practices.”
The bank on Monday repeated what it said when the July settlement was reached.
“Chase has taken extensive steps over the past four years and is pleased to resolve these legacy issues,” according to its statement. “It is working to complete remediation of affected card customers.”
The California attorney general alleged that from 2009 to 2013, Chase filed more than 125,000 credit-card collection lawsuits against consumers relying on illegally robo-signed -- approved without adequate review -- sworn documents and sent letters to consumers that contained illegal threats.
Harris also claimed that Chase sold third-party collectors “zombie debts” that included accounts that were inaccurate, settled, discharged in bankruptcy, not owed, or otherwise not collectible.
Harris said in her statement Monday that the settlement also included $50 million in restitution for consumers nationwide, including $10 million for California customers.
Paul Hartwick, a spokesman for JPMorgan, said the restitution payment was first announced in 2013.
Kristin Ford, a spokeswoman for Harris, didn’t immediately respond to a phone message seeking comment on the restitution.
The case is People v. JPMorgan Chase & Co., BC508466, California Superior Court (Los Angeles County).