JPMorgan Chase & Co. has agreed in principal to pay $125 million to resolve allegations by U.S., state and federal authorities alleging the bank attempted to improperly collect and sell consumer credit card debt by relying on robo-signing (signing documents in mass quantities without reviewing records), providing inaccurate information to debt purchasers as well as other questionable methods of collecting consumer debt. The settlement also includes about $50 million in restitution, the sources said.
The U.S. Consumer Financial Protection Bureau (CFPB), forty-seven state regulators and the District of Columbia are expected to announce the settlements as soon as Wednesday. However, Mississippi and California are not expected to settle at the same time. The participating states will split some $95 million, while the CFPB will get $30 million. Characteristically, JPMorgan Chase and the CFPB did not return calls for comment.
In September 2013, the CFPB ordered JPMorgan to refund $309 million to approximately million customers for illegal credit card practices, including charging consumers for credit card monitoring services they did not receive. At the same time, the Office of the Comptroller of the Currency 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 in the bank's debt collection practices, including how they conducted debt sales. At that time, JPMorgan said collection issues affected less than 1 percent of customers and that it stopped filing collection lawsuits in 2011 and stopped enrolling customers in credit monitoring services in 2012.
If you have experienced questionable or illegal debt collection practices, contact the experienced securities fraud attorneys at Colling Gilbert Wright & Carter for a free case evaluation