Can California Take Down JPMorgan in Court?
The Golden State is not happy with JPMorgan Chase (NYSE:JPM). On Thursday, the state’s top law enforcement official accused the nation’s largest bank of practicing dubious law processes that would enable them to sue tens of thousands of California consumers and collect overdue credit card debt from them, The New York Times reports.
California’s state attorney general, Kamala D. Harris, contends that, from January 2008 to April 2011, JPMorgan filed thousands of lawsuits each month to collect outstanding credit card debt. The company has been sued in California Superior Court with accusations that the bank used questionable documents, took shortcuts in court and used erroneous evidence to ensure its success and sue at a preposterous pace. The New York Times reports that court records show JPMorgan filing 469 lawsuits on a single day.
The Washington Post explains that the complaint filed by Harris also says that JPMorgan “failed to properly serve notice of debt collection lawsuits against consumers while claiming the notices had been served,” allowing them to cut more corners for the sake of speed and cost savings.
Widespread abuses in debt collection are not exclusive to JPMorgan. The company’s rival banks have also been under scrutiny for flaws in credit card lawsuits. An increasing number of reports have shown instances of debt collectors failing to use proper documentation to file their lawsuits.
Nonetheless, California’s top prosecutor “[demands] a permanent halt to these practices and redress for borrowers who have been harmed.” Though the complaint doesn’t specify what she demands for damages, under California law, each victim would be entitled to up to $2,500 per violation.