Thursday, May 9, 2013

California Sues JP Morgan for Fraudulent and Criminal Debt-Collection Practices

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Activist Post

LOS ANGELES -- Attorney General Kamala D. Harris today filed an enforcement action against JPMorgan Chase & Co. (Chase) alleging that the bank engaged in fraudulent and unlawful debt-collection practices against tens of thousands of Californians.

The suit alleges that Chase engaged in widespread, illegal robo-signing, among other unlawful practices, to commit debt-collection abuses against approximately 100,000 California credit card borrowers over at least a three-year period.

“Chase abused the judicial process and engaged in serious misconduct against California credit card borrowers,” Attorney General Harris said. “This enforcement action seeks to hold Chase accountable for systematically using illegal tactics to flood California’s courts with specious lawsuits against consumers. My office will demand a permanent halt to these practices and redress for borrowers who have been harmed.”

From January 2008 through April 2011, Chase filed thousands of debt collection lawsuits every month in the State of California. On one day alone, Chase filed 469 such lawsuits in California. The Attorney General’s complaint against Chase alleges that, to maintain this pace, Chase employed unlawful practices as shortcuts to obtain judgments against California consumers with speed and ease that could not have been possible if Chase had adhered to the minimum substantive and procedural protections required by law.

“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 used California’s judicial system as a mill to obtain default judgments, the suit alleges, using illegal tactics to flood the state’s court system in order to secure default judgments and garnish wages from Californians.

The alleged misconduct includes:
  • Robo-signing: Chase illegally robo-signed various litigation filings, including sworn documents, declarations, and verified complaints, without reviewing the relevant files or bank records or even reading the documents before signing.
  • “Sewer Service”: Chase failed to properly serve notice of debt collection lawsuits against consumers while claiming they had been served as required by law. This practice, known as “sewer service,” deprives the consumer of any notice of the lawsuit.
  • Filing Irregularities: Chase haphazardly assembled its official legal filings. For example, Chase failed to redact consumers’ personal information in attachments to filings, potentially exposing them to identity theft and in violation of California law. In addition, when asking courts to enter default judgments against consumers, Chase consistently swore under penalty of perjury that the consumers were not on active military duty. In fact, Chase never checked. This deprived service members of important legal protections to which they are entitled while on active duty.
The suit was filed in Los Angeles Superior Court and a copy of the complaint is attached to the online version of this release at Or click here to directly access the complaint.

Consumers who believe they have been victims of this misconduct may submit a complaint online at

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Anonymous said...

Every state should do the same and review all practices, policies and procedures of Chase and all banking institutions. They all think they are above the law.

wright4ulg said...

The People of California Call For Attorney General Kamala D. Harris To Run
For President of the Untied States And Not Florida Attorney General Pam

Piggybankblog Interview:

My name is John Wright AND I AM FIGHTING BACK!

John Wright

Anonymous said...

State and Federal governments that sue other corporations who are plundering the people for profit are like the pot calling the tea kettle black.
Why don't you look in the mirror and then file suit?

Anonymous said...

Contrast this to the state of Florida saying the foreclosure process is so bogged down the Supreme Court is going to authorize ATTORNEYS to process foreclosures since there aren't enough JUDGES! As we know,there are a lot of unemployed real estate attorneys in Florida waiting for the new bubble. You don't think REALTORS are behind this change, do you? It has to be easier to get attorneys to NOT read the robo-signed paperwork. Oh come on, you know you feel sorry for the TBTF banks. Besides, what could go wrong?

Nathaniel Copeland said...

The state AGs everywhere are on a streak against collectors it seems. First Lori Swanson taking down medical debt collectors in MN, then NY Senate passing the CCF Act and now Chase having its pants sued off the CA AG. Good news for consumers everywhere.

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