JPMorgan Chase, the United States’ largest bank, has agreed to a settlement of cases brought against it by 47 states and the Federal Consumer Financial Protection Bureau. The settlement will cost the bank more than $200 million, according to the Los Angeles Times, but does not completely resolve claims that it robo-signed documents, among other charges. California is not a party to the settlement, and the state’s lawsuit against Chase is continuing.
Announced earlier in July, the settlement will include refunds of at least $50 million to consumers. The cases centered around the types of debts Chase sold to third-party debt collection companies. Federal and state authorities accused Chase of selling debt collectors accounts with paid-off balances, inaccurate balances, legally flawed judgments and debts owed by deceased people.
When Chase handled its own debt collections, it frequently used robo-signed documents, in which the person signing the sworn statement did not even read it, as the basis for lawsuits against customers, the head of the federal bureau said.
Besides repaying affected consumers, Chase will pay $136 million to the federal government and the states involved in the settlement. It will also pay a $30 million penalty to the Office of the Comptroller of the Currency. It will also halt collections on more than 528,000 accounts, and promises to reform its debt-sales practices.
Banks have the right to be repaid for their loans, but they are not allowed to harass customers, or go after them for money they do not owe. One way victims can fight back is by filing suit, perhaps as part of a class action.