Credit Business

Filed by Kamala Harris, the complaint outlines that JPMorgan Chase committed debt collection violations against tens of thousands of California residents. The company has been reported to have filed thousands of lawsuits between 2008 and 2011 that sought to collect debt from past due credit card statements. In one day alone, it was reported that the lender filed nearly 500 lawsuits.

At the heart of the perceived illegality of these actions is the fact that the bank used a variety of tactics to process these applications that are considered to be unlawful. For instance, many lawsuits were filed using unverified legal documents that call into question whether these lawsuits were even valid in the first place.

This is not the first case of trouble for the lending giant. Robosigning abuses (where automated machines are used to process legal documents in a rapid fashion without review) led to a multi-billion dollar settlement key banks following the foreclosure crisis. Again, the main issue behind this tactic was the neglect of the banks to verify information that is paramount before filing lawsuits and foreclosures.

With many of the filed lawsuits containing questionable or incomplete records, according to the Attorney General’s office, JPMorgan Chase may be held liable for penalties in the billions of dollars. Since the vast majority of the cases filed do not adequately demonstrate that the holder of the debt actually owes the debt, these cases are being viewed and frivolous and in some cases, fraudulent.

This is not an isolated phenomenon, either. Industry analysts suggest that virtually every major lender and financial institution has engaged in these practices and could be on the receiving end of future lawsuits by California and other states.
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