jpmorganchase

Recently, state and federal authorities announced JPMorgan Chase will have to pay $166 million to settle charges that it engaged illegal debt collection activities for years.  Additionally, they now must adhere to strict new debt collection rules. The bank will also refund at least $50 million to consumers and agree to permanently end collection activities on more than half a million accounts.

The Consumer Financial Protection Bureau and 47 state attorneys general joined in the enforcement action, which says Chase routinely violated laws governing how debt is collected for several years beginning in 2009.

“Chase filed more than 528,000 debt collections lawsuits against consumers and provided more than 150,000 sworn statements to debt buyers for their collections lawsuits against consumers, often using robosigned documents. In doing so, Chase systematically failed to prepare, review, and execute truthful statements as required by law,” the CFPB said.

Chase is also accused of collecting on so-called zombie debts — accounts that were either already settled or too old to collect on.  “Chase sold faulty and false debts to third-party collectors, including accounts with unlawfully obtained judgments, inaccurate balances, and paid-off balances,” the CFPB alleges. Evidently, Chase also sold debts that were owed by people who were deceased.

To settle the case, Chase will refund consumers who were sued between Jan. 1, 2009, and June 30, 2014, for amounts paid above what the consumer owed when the debt was referred for litigation, plus 25% of the excess amount paid.