Massachusetts Attorney General Martha Coakley is looking into JPMorgan Chase & Co.’s (JPM) debt collection practices over how the bank gets payments from borrowers that are delinquent. Coakley’s probe is separate from the one being conducted by a group of 13 states.
According to JPMorgan, the bank stopped suing over credit-card collection two years ago. In May, the state of California filed a credit card debt collection case against the bank for the “unlawful” and “fraudulent” tactics it purportedly employed to go after old debts from 100,000 borrowers. The case is still pending.
JPMorgan has come under fire from regulators about how it collects such debt. Last week, the Office of the Comptroller of the Currency said it had had reached a $60 million settlement deal with the bank over the latter’s use of sworn documents in its lawsuits against borrowers to collect delinquent debt. According to the OCC, JP Morgan and its outside lawyers allegedly submitted documents that were not accurate to court, failed to correctly notarize documents, and made unverified statements about the bank’s accuracy. The regulator told the bank that they must now tell consumers when their debt is sold to a third party, correctly keep up account documents, and make sure that staff and other employees that are party to any litigation get the information that they need. Meantime, the JPMorgan says it will pay $20 million to the Consumer Financial Protection Bureau, which has been probing possible abuses by those in the debt-collection industry and examined JPMorgan’s handling of credit card debt.
The claims also involved products that JPMorgan sold to holders of credit cards. The products, which were supposed to provide identify fraud protection, were never created even though the bank used them between 2005 and June of last year.
Earlier this year, California Attorney General Kamala Harris sued JPMorgan accusing the bank of debt collection abuse involving over 100,000 credit card cases that victimized tens of thousands in the state.
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Massachusetts Probes J.P. Morgan’s Debt-Collection Practices, The Wall Street Journal, September 20, 2013
Mass. AG Martha Coakley launches investigation into JPMorgan Chase’s debt collection practices, Boston Business Journal, September 23, 2013
More Blog Posts:
California AG Files Lawsuit Against JP Morgan Chase Alleging Debt Collection Abuse Over 100,000 Credit Card Cases, Stockbroker Fraud Blog, May 16, 2013
JPMorgan to Pay $920M to Settle London Whale Debacle & $80M Over Credit-Card Practice Allegations, Institutional Investor Securities Blog, September 19, 2013
Texas Man gets 40-Year Prison Sentence for Phony Annuity Scam That Targeted Elderly Women, Stockbroker Fraud Blog, September 23, 2013