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JPMorgan to Pay $136 Million to Settle Debt Collection Case
WASHINGTON — JPMorgan Chase will pay $136 million to settle charges that it used illegal tactics to pursue delinquent credit card borrowers, the Consumer Financial Protection Bureau announced on Wednesday.
The bureau said the bank had illegally relied on robo-signing — signing mass quantities of documents without verifying the data in those accounts — and provided inaccurate information to third-party debt collectors when it sold the accounts. The bureau also said that Chase filed misleading lawsuits using inaccurate information to obtain debt collection judgments on accounts that had been paid off, were discharged in bankruptcy or otherwise were uncollectable.
“Chase sold bad credit card debt and robo-signed documents in violation of law,” the bureau’s director, Richard Cordray, said in a statement on Wednesday.
Under the terms of the agreement, JPMorgan Chase will refund $50 million to affected consumers and pay $136 million in fines to the bureau, 47 states and the District of Columbia. The bank will permanently stop collecting on 528,000 accounts.
It also will pay a separate $30 million penalty to the Office of the Comptroller of the Currency.
The agreement includes changes to the way Chase will collect delinquent accounts. Any accounts that Chase sells to debt collection agencies cannot be resold to other agencies. Chase will also have to verify individually any accounts it sells to a debt collection agency, confirming the debts are valid, and it will have to notify the delinquent customer that the debt was sold, among other changes.
JPMorgan Chase had reached a similar, earlier agreement with federal regulators regarding its debt collection practices in 2013. The New York bank has refunded more than $50 million to consumers under that order.
“We are pleased to resolve these legacy issues,” the bank said in a statement.
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