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Hey, remember when JPMorgan Chase abruptly suspended all their debt collection court cases a couple months ago? Now we’re learning more about the problems in their debt collection arena. And surprise, we have more robo-signing!
The abuses are so bad that even the bank-friendly Office of the Comptroller of the Currency has been roused to investigate:
JPMorgan Chase & Co. took procedural shortcuts and used faulty account records in suing tens of thousands of delinquent credit card borrowers for at least two years, current and former employees say.
The process flaws sparked a regulatory probe by the Office of the Comptroller of the Currency and forced the bank to stop suing delinquent borrowers altogether last year.
The bank’s errors could call into question the legitimacy of billions of dollars in outstanding claims against debtors and of legal judgments Chase has already won, current and former Chase employees say.
For the banking industry at large, the situation at Chase highlights the risk that shoddy back-office procedures and flawed legal work extends well beyond mortgage servicing.
“We did not verify a single one” of the affidavits attesting to the amounts Chase was seeking to collect, says Howard Hardin, who oversaw a team handling tens of thousands of Chase debt files in San Antonio. “We were told [by superiors] ‘We’re in a hurry. Go ahead and sign them.’”
Linda Almonte, a former Chase employee, made similar allegations back in 2010, which have been corroborated by these accounts. Back then she alleged that Chase sold credit card debt to third parties while knowing that the balances on the accounts were incorrect or overstated. In addition, Almonte asserted that Chase executives routinely destroyed information sent by consumers looking to resolve complaints. That’s on top of the robo-signing. Almonte filed the case with the SEC, but it’s finally made its way to the proper federal regulator. And all of the claims, including the trashing of borrower documents, were recapitulated here. JPMorgan Chase, of course, claims that “the overwhelming majority” of their credit card suits were correct. That means some of them weren’t, right?
More from Yves Smith and Pat Garofalo. The abuses described here are serious and extensive. Of course, the OCC’s mission in life is to protect banks. So I look forward to the resolution of these debt collection robo-signing claims (and by the way, the credit card holders should have just paid their balances!) with a settlement releasing liability in exchange for consumer relief paid for by, I don’t know, depositors.
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So, the regulators find out JP Morgan is breaking the law and destroying their customers’ records in going after credit card debt, and the bank has to suspend lawsuits. But no one bothers to tell the defendants in those suits why?? No public announcement from the regulator warning potential defendants to beware and preserve documents that the bank might have destroyed?
And can someone cross check dates against all the public whining that the CEO was doing about everybody picking on the poor banks.
We don’t have a functioning system of law in this country. Haven’t had for several years now. The banks just make up the rules as they go along.
I don’t see how the toothpaste goes back in the tube at this point.
Current headline on Yahoo news:
Truly, it is to laugh.
I have never had a Chase credit card, but once came home from a weekend away to find 19 abusive phone calls on my answering machine from their collection goons.
Gee, to think that back in 2008 we actually had these Zombie banks groveling at the door of government pleading to be saved. Yet, we let them live and now the Zombies are back, still terrorizing and all that other stuff they do. When we had the chance, we should’ve ran out back and grabbed one of those large wooden fenceposts laying in the barn and then proceeded to pummel these bastards until they died a slow, painful death. Then we should have repossessed all their cars and houses and offshore accounts. Then we should have taken the dead zombies and hung them in the public square to show what happens to financial criminals in a just society.
Like vampires, once you let them in the door, they can always come back
Still sounds like a good idea to me.
They handle department store cards…lots of them. Look for the fine print on the back of a department store card to see who services it.
Metaphorically, of course.
Under Yves Smith’s post linked to above, the following commenter leaves an intriguing post. She, I believe, is the whistleblower Linda Almonte in this JC Morgan investigation by the OCC:
from http://www.nakedcapitalism.com/2012/03/jp-morgan-under-occ-investigation-for-serious-debt-collection-abuses-warnings-ignored-for-over-two-years.html
Go, Linda! At least she’s leaving us breadcrumbs to know which agencies actively pursue this and which instead actively seek a broom and a rug corner.