JPMorgan Settles Credit Card Abuse Case for $100 Million
Last week, JPMorgan Chase agreed to pay $100 million as restitution for allegedly using illegal methods to collect payments from credit card customers.
The allegations against the company said Chase filed more than 125,000 collection lawsuits against cardholders by illegally robo-signing sworn documents from 2009 to 2013. They also sent illegal and threatening letters to credit card customers.
To settle the 2013 lawsuit, JPMorgan will pay $50 million to the state of California in penalties and an additional $50 million to cardholders located throughout the country, including $10 million to California consumers.
This agreement comes after an announcement in July that the financial institution would change, what regulators called, abusive tactics to collect debts. At that time, JPMorgan Chase agreed to pay $166 million for claims and penalties filed by the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency and 47 other states.
California Attorney General Kamala Harris sued JPMorgan in May 2013, alleging that Chase had used “widespread and illegal robo-signing” and other illegal practices when attempting to collect debts from credit card borrowers.
“Abusive and illegal debt-collection practices will not be tolerated in California,” Harris said in a statement. “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.”
For its part, Chase released a statement saying that it has taken “extensive steps” over the past four years to resolve legal issues and remediate problems with cardholders.