JPMorgan Chase Fined $136M Over How It Collects Debt
JPMorgan Chase will pay $136 million in penalties to the Consumer Financial Protection Bureau and states to settle charges that it used illegal tactics to target delinquent credit card borrowers.
Here's what the CFPB says Chase did:
"The CFPB and states found that Chase sold 'zombie debts' to third-party debt buyers, which include accounts that were inaccurate, settled, discharged in bankruptcy, not owed, or otherwise not collectible."
CFPB Director Richard Cordray said in a statement: "Chase sold bad credit card debt and robo-signed documents in violation of law. Today we are ordering Chase to permanently halt collections on more than 528,000 accounts and overhaul its debt-sales practices. We will continue to be vigilant in taking action against deceptive debt sales and collections practices that exploit consumers."
Under the agreement, Chase will also pay at least $50 million in consumer refunds and $30 million in penalties to the Office of the Comptroller of the Currency. It was also ordered to stop all attempts to "collect, enforce in court, or sell more than 528,000 consumers' accounts," CFPB said.
Also under the deal: The buyers of debt from Chase aren't allowed to resell it — unless it's back to Chase; Chase must verify that debts are valid before they are sold; and consumers must be notified that their debt has been sold.
The CPFB was joined by 47 states and the District of Columbia in Wednesday's action, the statement said.
The Associated Press adds:
"The three states that were not part of the settlement were California, Mississippi and Wyoming. California has litigation pending against JPMorgan, while Mississippi is continuing its own separate lawsuit against Chase, a spokeswoman said. The Wyoming attorney general office could not be immediately reached for comment on why they did not participate in the settlement."
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