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Chase slows collections

By Janna Herron ·
Thursday, January 19, 2012
Posted: 4 pm ET

It seems like Chase is letting some delinquent credit card holders loose.

Court records in major cities in California, Florida, Maryland, New York and Washington indicate that Chase has withdrawn nearly all its collection suits against cardholders, according to a recent article in American Banker. And Illinois records show the credit card issuer continues to file small claims but at a slower rate.

What's going on here?

Chase declined to comment for the article, but rumors are circling.

Along with the MIA collection claims, the issuer also fired many regional collections teams in the middle of last year without explanation, the article's sources said. One anonymous source said there may have been investigations by the Office of the Comptroller of the Currency and other government departments.

Add to that a former employee-turned-whistle-blower alleging the bank falsely inflated balances on thousands of delinquent accounts and lacked adequate documents for judgments on cases it sold to a collection agency. Chase didn't dispute the errors, saying the accounts it sold were sold "as is" and "with all faults," according to American Banker.

Now some are wondering if this is the next robo-signing scandal.

(Robo-signing is a term that went mainstream after several banks, including Chase, halted thousands of foreclosures in 2010 to examine possibly fraudulent case documents. It came to light that several bank employees and employees of law firms hired by banks didn't properly review foreclosure cases. In some cases, they forged signatures to push the cases through the pipeline.)

I think the real red flag is if more banks follow suit. Then it smells fishy.

But the consumer lesson here is to make sure your issuer has accurate information on your credit card account. If the account is sold to a collection agency, get written verification of the debt from the third-party collector and confirm the collector's identity with your bank.

Also, review your rights under the Fair Debt Collections Practices Act, which outlines when a third-party collection agency can call and how often.

Has a collection agency gone after you with the wrong credit card account information?

Follow me on Twitter: @JannaHerron.

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1 Comment
noreen Faiz
January 20, 2012 at 2:08 pm

I had chase bank card debt which was sold to Midland Funding, who decided to sue me....They sent me summons for this. I did reply to the summons...Oc-course, I do not have a job, car or home. I am living on charity of others. But I also notes that in the summons it said my balance is $80000, which is not correct, I did not have a balance more than $2000, if this at all.
So who raised my balance the Midland funding or Chase?