California vs. Chase Bank – Lawsuit Over Debt Collection Practices
Earlier this month we learned that mega-bank JP Morgan Chase’s request for the dismissal of the lawsuit California Attorney General Kamala Harris brought against the bank in May 2013 was rejected by California Superior Court of Los Angeles Judge Jane L. Johnson. The lawsuit alleges extensive debt collection abuses in Chase’s credit card unit, and the Judge outright rejected Chase’s argument that California legal authority precluded the Attorney General’s claims of unfair competition.
According to the lawsuit, JP Morgan Chase – the country’s largest credit card lender – unlawfully attempted to collect debt from approximately 100,000 credit card borrowers from April 2008 through January 2011. Despite a lack of evidence that the consumers in question defaulted on their credit card debt, Chase allegedly pressed on, filing lawsuits against the credit card holders.
The cost of Chase’s alleged illegal practices
The bank could end up shelling out more than their alleged unlawful collection practices could have garnered: the State of California is seeking civil penalties of $2,500 for each violation of California law, as well as $2,500 for each violation against a senior citizen or person with a disability.
Chase filed an average of 100 suits each day
How is that even possible? Well, the bank allegedly used robo-signing, which allowed them to push lawsuits without reviewing them first. According to the State’s complaint, Chase also abused consumers by demanding they immediately pay their balance and threatening sent letters to consumers demanding payment off the balance due, threatening to embellish their income and place liens on property if the balance was not paid in full. In her complaint, Attorney General said the lawsuits against the consumers were barely legitimate at best, due to the manner in which the mega-bank went about filing the lawsuits.
The next hearing is scheduled for February 10
Chase Lawyer David Schrader already stated he will ask the Judge to attest to her decision for immediate appeal to the California Court of Appeals at the next hearing, a request which Deputy Attorney General Bernard Eskandari said he would oppose.
Chase has faced debt collection lawsuits before
The bank’s debt collection practices have given them legal trouble before; it was only this past September that Chase finally ended their long legal battle with the Office of the Comptroller of the Currency (OCC) by agreeing to a consent order. These investigations, and Chase’s subsequent payout, will likely affect how banks go about collecting debt in the future.