The collection department of JPMorgan Chase has been disbanded over the past few months, due to the ceasing of legal action in order to reclaim debts accumulated by their customers.
They have also reduced their staffing levels by terminating the contracts of their employees that were involved in collecting the debts. They have (according to American Banker), dismissed “numerous regional collections teams.”
JPMorgan Chase has not explained why it is no longer taking any legal action against its credit card debtors, but it may be more than a coincidence that their action has followed several court rulings that bring into question the claims by many banks of their credit card claims.
Their cause has been hindered further by the former JPMorgan vice president who was in charge of selling tardy credit card loans becoming a whistle blower. The former executive Linda Almonte who made the complaint, claims that the bank employees robo-signed the necessary paperwork that is used in court to get judgments against debtors.
Robo-signing is a system that sees legal documents signed in large amounts and is a controversial system that hit the headlines last year when a large number of homeowners found themselves being evicted illegally thanks to robo-signed paperwork.
Almonte is adamant that a large number of account holders at JPMorgan had a lot less debt on their credit cards than the bank had originally suggested they had initially and that even some customers were being chased for debt that they had in fact cleared from their credit cards altogether. Almonte also claims that after notifying the bank of the problem of missing documents relating to selling of credit card debt, she was summarily dismissed and JPMorgan settled Almonte’s lawsuit.
In six states across the entire country which include Illinois, Maryland, Florida, California, Washington and New York, JPMorgan have stopped attempting to recover overdue credit card debts all together. The bank has failed to follow through to a conclusion on over one thousand lawsuits across the country that were to be used to collect on overdue credit card loans.
There could be a devastating knock-on effect across the banking industry if it is found that JPMorgan Chase have failed to bring to conclusion a large number of lawsuits due to fraudulent and error strewn paperwork. In fact a few experts have already suggested that robo-signing may be widespread when it comes to collecting credit card debts.
