Tens of thousands of Californians may have been the victims of unlawful debt collection practices if state attorney general Kamala Harris’ investigation proves correct. The AG recently filed an enforcement action against JPMorgan Chase & Company alleging that the lender engaged in “widespread, illegal robo-signing” and other unlawful practices in order to “commit debt-collection abuses against approximately 100,000 California credit borrowers over at least a three-year period”. Harris accused Chase of “abus[ing] the judicial process and engaging in serious misconduct against California credit borrowers” and added that the lender attempted to flood California courts with “specious lawsuits” that ultimately enabled Chase to obtain judgments against borrowers “with a speed and ease that could not have been possible” if the lender had actually adhered to the appropriate regulations.
Chase also is accused of sending letters to customers with allegedly defaulted credit cards without verifying that the customers were actually Chase customers or that they were in default. These letters are reported to have contained threats to claim property if the debts were not paid, even though this is not standard practice for JPMorgan Chase. The lender estimates that the costs of fighting these lawsuits could reach beyond its reserves, given that the bank has already been hit with regulatory orders related to the “London Whale” incident.
Do you think that Harris has a good shot at JPMorgan? What should the lender have to do to make up for this “bad” behavior?
Your comments and questions are welcomed below.
by Carole VanSickle