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Chase sued over debt collection

By Janna Herron ·
Friday, May 10, 2013
Posted: 6 pm ET

The California state attorney general is suing Chase for alleged credit card debt collection abuses against more than 100,000 state residents over three years.

The suit filed Thursday with the Los Angeles Superior Court claims the bank signed court documents without verifying the information beforehand, also known as "robosigning." The practice became notorious in 2010 after it surfaced that several banks, including Chase, didn't properly confirm foreclosure filings before taking homes from mortgage borrowers.

The state attorney general, Kamala Harris, also alleges that Chase did not properly serve notices of debt collection lawsuits to consumers. The bank also failed to omit personal information on filings as required by state law, the suit claims. And it didn't verify if servicemen and women were on active military duty before getting judgments against them, according to the lawsuit.

The complaint includes debt collection lawsuits from January 2008 through April 2011.

"At nearly every stage of the collection process, defendants cut corners in the name of speed, cost savings, and their own convenience, providing only the thinnest veneer of legitimacy to their lawsuits," the complaint states.

Chase did not have any comment on the lawsuit at this time.

California's lawsuit is just the beginning, says Bill Bartmann, CEO of debt collection firm CSF2, who submitted a white paper on credit card debt collection abuses in the industry to the White House's National Economic Council.

Bartmann says other state attorney generals are looking to file similar lawsuits against Chase, and a group of state AGs are preparing petitions against other major credit card issuers. The Office of the Comptroller of the Currency began investigating Chase last year for debt collection abuses.

The number of victims from credit card debt collection abuses could be 10 times those seen from the foreclosure robosigning scandal, Bartmann says.

"This is going to be much bigger than the foreclosure robosigning issue a few years ago," he says. "The credit card customer base is gargantuan. There could to be as many as 45 million victims."

Follow me on Twitter: @JannaHerron

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November 15, 2013 at 6:34 am

I had a mortgage with chase that went into foreclosure they sent a notice sayin my home would sold at a sheriff sale and I had 6mths redemption. this was june 2008 now its 2013 and I find out they didn't sell it they stop the foreclosure and sold my first mortgage to a collection agency in 2011. My credit report show the mortgage paid 0 balance. the collection agency is nowhere on my credit report. I have talk to a few bank brokers and mortgage companys and no one has heard of a first mortgage being sold to a collection agency maybe 2nd mortgage or helo but a first mortgage something is not right.and what happen between 2008 to 2011

May 12, 2013 at 12:46 pm

This is much needed. And this should be cleared up since many companies use the plastic to pay and the government uses it for benefits. There are too many people trying to "do business" without the proper training or education or dare I say intellect. Being haphazard with somebody else funds can have grave effects!