CFPB Fines Chase Bank $218 million for Robo-Signing Affidavits Used in Court Cases against Consumers

Discover How Summons From Credit Card Debt Attorney Involve Junk Debt BuyersChase Bank has finally been taken to the woodshed for its past credit card debt affidavit robo-signing misdeeds.  It has been fined $216 million and ordered to halt collection on 528,000 consumer credit card accounts.

Local rules of civil procedure allow a business to substitute a signed, sworn affidavit from someone with personal knowledge of a credit card in support of documents used to substantiate that a debt is owed by a consumer for a live witness in court who could do the same thing. Chase provided thousands of phony credit card debt affidavits to its national network of collection attorneys pursing consumers in court for bad credit card debt. It was caught first by one state, then and another and another until it capitulated to the CFPB consent decree.

As these individual state suits developed, I reported them in past blog entries  (JP Morgan Chase Getting Spanked Again for Illegal Documentation and Major Credit Card Bank Stops All Credit Card Lawsuit)

Here are the main points from the Consumer Finance Protection Bureau press release announcing this action in July.

  • Pay at least $50 million in cash redress to consumers: Chase will pay cash refunds to consumers against whom collections litigation was pending between January 1, 2009 and June 30, 2014, for amounts paid above what the consumer owed when the debt was referred for litigation, plus 25 percent of the excess amount paid.
  • Prohibit debt buyers from reselling accounts.
  • Confirm debt before selling to debt buyers: Chase cannot sell debts that have been paid, settled, discharged, or are otherwise not collectable.
  • Notify consumers that their debt has been sold and make their account information available to them.
  • Not sell zombie debts and other specified debts: Chase may not sell debts that do not have the required documentation, have been charged off for over three years or where the consumer has not paid for three years, are in litigation, are owed by a member of the armed services, are owed by someone who is deceased, or where the debtor has a payment plan.
  • Withdraw, dismiss, or terminate collections litigation:— pending at any time after January 1, 2009.
  • Stop robo-signing affidavits: Declarations must be signed by hand, must reflect the actual date of signing, and must be based on the direct knowledge of the person signing and their review of Chase’s business records. Supporting documents submitted for debt collection litigation [in support of each credit card debt affidavit] must be actual records of the debt, verified to be accurate, and not created solely for litigation.
  • Verify debts when filing a lawsuit: When filing collections lawsuits, Chase is required to submit specific information associated with the debt including the name of the creditor at the time of the last payment, the date of the last extension of credit, the date of the last payment, the amount of debt owed, and a breakdown of any post-charge-off interest and fees.
  • Pay $30 million civil penalty: Chase will pay a fine for its unlawful debt sales and robo-signing practices.

You can read more of my posts on nonpayment of credit card debt or consult my program for the proper way to demand documentation of an alleged debt when answering a credit card lawsuit or for how to find the right attorney, experienced in beating these “no-doc” lawsuits and able to do that for you at a reasonable fee.

 

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