JP Morgan Chase to Pay $100 Million in Credit Card Debt Settlement

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.

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