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Chase Bank to Pay $136 Million to Settle FDCPA claims (1)

If you bank with JP Morgan Chase, there is a good chance you could be receiving a payout.  Just this past week, the mega bank settled a Fair Debt Collection Practices Act (“FDCPA”) case filed by the Consumer Financial Protection Bureau ("CFPB") for $136 million payable to consumers residing in 47 states across the country with a majority of the consumers residing in Florida.  The large payment  is a consequence of the Bank’s conduct for its violations of collection laws and the illegal sale of credit card debt.     

According to the CFPB, the agency in charge of protection of consumer rights in the financial marketplace, the banking giant violated the law on numerous grounds.  In its complaint against the Bank, the CFPB stated violations that occurred included 

-erroneous credit reporting and reporting of inaccurate judgments;
-attempting to collect debts from consumers with knowledge that the debts did not belong to the consumers;
-filing suit and receiving judgments against consumers using fictitious documentation;
-selling debts that were no longer valid to collection agencies who proceeded to attempt collection;

In addition to the large pay out, JP Morgan Chase must also make adjustments to its practices and ensure compliance with both the FDCPA and the FCRA.   In its allegations, the CFPB stated the Bank relied on a practice referred to as robo-signing, which is signing large quantities of paperwork without ensuring the accuracy of the information.  The Bank then went on distribute the information to third party collection agencies when selling its debt.  

Under the terms of the settlement, JP Morgan Chase is ordered to pay $50 million to consumers and to pay $136 million in fines to the CFPB directly and to 47 states.  Furthermore, the Bank must stop collection of more than 500,000 accounts and pay an additional $30 million penalty to the Office of the Comptroller.  Sadly, this is not the first time this banking giant has violated the law.  In 2013, JP Morgan Chase was ordered to pay more than $50 million to consumers for violations of the FDCPA.  Based on extreme nature of the settlement order, hopefully the Bank will learn a lesson this time around and follow the letter of the law.

If you believe your rights have been violated under the FDCPA or the FCRA and would like the advice or assistance of counsel, contact SmithMarco P.C. for a completely free case review.

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