In a settlement with the state of California, JP Morgan Chase will have
to pay $50 million in compensation to customers and another $50 million
in fines to the state of California. This settlement comes after a $166
million settlement with the Consumer Financial Protection Bureau and Attorneys
General in 47 states and the District of Columbia in July 2015 due to
illegal sale and collection of credit card debt. The three states that
were not involved in the original settlement were California, Mississippi,
and Wyoming. In both the national and California settlements, JP Morgan
Chase neither admitted nor denied wrongdoing.
According to California Attorney General Kamala Harris, “This settlement
provides real relief to tens of thousands of Californians, including service
members, and prevents JPMorgan Chase from continuing these deceptive and
illegal debt-collection practices.” It has been alleged that between
2009 and 2013, JP Morgan Chase filed more than 125,000 credit card collection
lawsuits against California consumers relying on illegally robo-signed
documents and provided an additional 30,000 robo-signed sworn statements
in support of lawsuits against consumers by third-party debt collectors.
Additionally, this settlement addresses wrongdoings that include collecting
incorrect debt amounts, selling bad credit, and improperly obtaining default
judgments against military service-members.
The settlement includes financial as well as injunctive relief. A stipulated
judgment requires that JP Morgan Chase document and confirm all debts
before filing credit card collections lawsuits or selling credit card
debts owed to it. JP Morgan is barred from robo-signing court and other
documents and must refrain from selling, collecting, and enforcing in
court more than 528,000 consumer accounts. In a statement made by JP Morgan
Chase spokesman Paul Hartwick the bank claims it “has been working
to resolve debt collection problems over the last several years.