JPMorgan to settle US credit card debt probes
by Karen Freifeld,
2015-07-08 12:52:37.0
NEW YORK — JPMorgan Chase has agreed to pay at least $125m to settle investigations by US state and federal authorities that the bank sought to improperly collect and sell consumer credit card debt, according to people familiar with the matter.
The settlement also included about $50m in restitution, the sources said.
The nation’s largest bank has been accused of relying on robo-signing and other discredited methods of going after consumers for debts they may not have owed and for providing inaccurate information to debt buyers. Robo-signing refers to signing documents in mass quantities without reviewing records.
The US Consumer Financial Protection Bureau (CFPB), 47 states and the District of Columbia are expected to announce the settlements as soon as Wednesday, the people said.
The states would split about $95m, while the bureau would get $30m, the people said.
JPMorgan Chase and the Consumer Financial Protection Bureau did not return calls for comment.
A spokesman for Iowa Attorney-General Tom Miller, who has been leading a group of states in probing JPMorgan’s debt sales and collection actions, declined to comment.
Mississippi and California were not expected to settle at the same time, sources said. Both have lawsuits pending against JPMorgan over debt collection practices.
California Attorney-General Kamala Harris sued in 2013, claiming the bank engaged in fraudulent and unlawful debt collection practices against 100,000 California credit card borrowers over about three years.
The state claims the bank flooded state courts with questionable lawsuits, filing thousands every month, including 469 such lawsuits in one day alone.
Kristin Ford, a spokeswoman for the California attorney-general, did not return calls for comment.
Mississippi Attorney-General Jim Hood filed a similar lawsuit against JPMorgan in 2013.
The Mississippi lawsuit said employees described a "chaotic" and "disorganised" workplace marred by "rampant" mistakes, inadequate training, constantly changing policies, high turnover and unrealistic quotas.
Rachael Ring, a spokeswoman for the Mississippi attorney-general, would only say the lawsuit was pending.
In September 2013, the Consumer Financial Protection Bureau ordered JPMorgan to refund $309m to about 2-million customers for illegal credit card practices, including charging consumers for credit card monitoring services they did not receive.
The Office of the Comptroller of the Currency that month also issued a consent order against JPMorgan after identifying unsound practices in connection with the bank’s sworn document and collections litigation. The order demanded changes, including to debt sales.
At the time, JPMorgan said collection issues affected less than 1% of customers and that it stopped filing collection lawsuits in 2011 and stopped enrolling customers in credit monitoring services in 2012.
In 2012, Mr Miller helped negotiate a $26bn settlement with the nation’s largest banks over mortgage abuses, which also included robo-signing.
Reuters
Picture: REUTERS
NEW YORK — JPMorgan Chase has agreed to pay at least $125m to settle investigations by US state and federal authorities that the bank sought to improperly collect and sell consumer credit card debt, according to people familiar with the matter.
The settlement also included about $50m in restitution, the sources said.
The nation’s largest bank has been accused of relying on robo-signing and other discredited methods of going after consumers for debts they may not have owed and for providing inaccurate information to debt buyers. Robo-signing refers to signing documents in mass quantities without reviewing records.
The US Consumer Financial Protection Bureau (CFPB), 47 states and the District of Columbia are expected to announce the settlements as soon as Wednesday, the people said.
The states would split about $95m, while the bureau would get $30m, the people said.
JPMorgan Chase and the Consumer Financial Protection Bureau did not return calls for comment.
A spokesman for Iowa Attorney-General Tom Miller, who has been leading a group of states in probing JPMorgan’s debt sales and collection actions, declined to comment.
Mississippi and California were not expected to settle at the same time, sources said. Both have lawsuits pending against JPMorgan over debt collection practices.
California Attorney-General Kamala Harris sued in 2013, claiming the bank engaged in fraudulent and unlawful debt collection practices against 100,000 California credit card borrowers over about three years.
The state claims the bank flooded state courts with questionable lawsuits, filing thousands every month, including 469 such lawsuits in one day alone.
Kristin Ford, a spokeswoman for the California attorney-general, did not return calls for comment.
Mississippi Attorney-General Jim Hood filed a similar lawsuit against JPMorgan in 2013.
The Mississippi lawsuit said employees described a "chaotic" and "disorganised" workplace marred by "rampant" mistakes, inadequate training, constantly changing policies, high turnover and unrealistic quotas.
Rachael Ring, a spokeswoman for the Mississippi attorney-general, would only say the lawsuit was pending.
In September 2013, the Consumer Financial Protection Bureau ordered JPMorgan to refund $309m to about 2-million customers for illegal credit card practices, including charging consumers for credit card monitoring services they did not receive.
The Office of the Comptroller of the Currency that month also issued a consent order against JPMorgan after identifying unsound practices in connection with the bank’s sworn document and collections litigation. The order demanded changes, including to debt sales.
At the time, JPMorgan said collection issues affected less than 1% of customers and that it stopped filing collection lawsuits in 2011 and stopped enrolling customers in credit monitoring services in 2012.
In 2012, Mr Miller helped negotiate a $26bn settlement with the nation’s largest banks over mortgage abuses, which also included robo-signing.
Reuters
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