Newspaper article News Sentinel

Chase to Pay $166M over Collection Tactics

Newspaper article News Sentinel

Chase to Pay $166M over Collection Tactics

Article excerpt

JPMorgan Chase & Co. will pay $166 million and change credit- card collection practices after regulators found that the bank used abusive tactics to collect debts, the Consumer Financial Protection Bureau said Wednesday.

The company agreed to resolve claims that its Chase Bank USA and Chase Bankcard Services Inc. units pursued the wrong borrowers, sought incorrect amounts or so-called zombie debt that was too old, or relied on documents with improper signatures, according to a CFPB statement.

Of the penalties, $136 million settles claims brought by the Consumer Bureau, 47 states -- including Tennessee -- and the District of Columbia. The Office of the Comptroller of the Currency imposed a $30 million penalty in a related action, CFPB said.

"It is important that debt collectors have accurate information when collecting a debt," said Tennessee Attorney General Herbert Slatery III. "In some cases, collectors of Chase accounts had the wrong amount listed as the debt, and in other cases, they attempted to collect debts from people who were not even obligated on the account. Chase addressed these shortcomings in the settlement and addressed one particular problem by stopping those who bought the debt from reselling it. Flipping the debt to multiple parties caused all sorts of errors."

The settlement is JPMorgan's second in two years over its debt- collection practices. In September 2013, the OCC ordered the bank to refund more than $300 million to customers. The company agreed to resolve the latest claims without admitting or denying wrongdoing.

Under the CFPB agreement, about $95 million will be paid to the participating states and the District of Columbia. An additional $11 million will go to states that handled the negotiations. Another $30 million will go to the consumer bureau. …

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