The nation’s largest bank will pay $100 million to settle a lawsuit alleging it used illegal methods to collect debts from more than 125,000 credit card holders in the Southland and elsewhere, it was announced today.
JPMorgan Chase & Co., the largest U.S. bank by assets, will pay an estimated $10 million to consumers in California as part of a previously announced $50 million national agreement, and will pay another $50 million in penalties to the state to settle a 2013 lawsuit, according to a filing in Los Angeles Superior Court.
A request for comment left with a Chase representative was not immediately answered.
The settlement specifically addresses debt collection wrongdoing that includes collecting incorrect amounts, selling bad credit card debt, and running a debt collection mill that involved illegally “robo-signing” thousands of court documents and improperly obtaining default judgments against military servicemembers, state Attorney General Kamala Harris said.
The settlement includes reimbursing military members in cases where the company improperly obtained default judgments.
The judgment — which is subject to court approval — includes terms that fundamentally change Chase’s credit card debt-collection practices to prevent similar misconduct in the future, Harris said.
“Abusive and illegal debt collection practices will not be tolerated in California,” she said. “This settlement provides real relief to tens of thousands of Californians, including servicemembers, and prevents JPMorgan Chase from continuing these deceptive and illegal debt collection practices.”
Between 2009 and 2013, Chase filed more than 125,000 credit card collection lawsuits against California consumers relying on illegally robo- signed sworn documents and provided an additional 30,000 robo-signed sworn statements in support of lawsuits filed against California consumers by third- party debt-collectors, according to court documents.
Chase also made systematic calculation errors regarding the amounts owed, and sold “zombie debts” to third-party debt-collectors that included accounts that were inaccurate, settled, discharged in bankruptcy, not owed, or otherwise not collectable, Harris said.
