JPMorgan accused of credit-card misconduct by Mississippi

JPMorgan Chase’s (JPM) defunct credit-card debt collection operations are still causing problems for the financial giant. 

Mississippi Attorney General Jim Hood on Tuesday filed a lawsuit against the investment bank that alleges the company pressured customers to pay up for debts they didn't owe, leading to garnished wages and damaged credit scores, and relied on sloppy record-keeping and legal work, the American Banker reports.

JPMorgan declined to comment on the lawsuit, a spokesman told CBS MoneyWatch.

The lawsuit, which included redactions, is what the American Banker calls “the most detailed and potentially damning attack so far on JPMorgan Chase's credit card debt collections operation.”

 

Whatever the outcome of the lawsuit, the credit-card debt collection operations continue to haunt the bank. The Office of the Comptroller of the Currency, which regulates national banks, launched an investigation into the operations last year. That led to the OCC in September ordering the bank to refund $309 million to customers and to pay $80 million in fines. The bank has also faced an investigation from a group of 13 states. 

The latest legal trouble related to the credit-card debt collection group comes after Mississippi AG Jim Hood said his department had “tried for months to resolve our concerns cooperatively, but have been forced into litigation,” according to a written statement cited in the American Banker. 

The industry newspaper notes that the Mississippi complaint alleges the bank created collections quotas for workers, and fired those who couldn't keep up. Basic customer information allegedly suffered from discrepancies because of different systems. On top of that, the lawsuit alleges two law firms hired by the bank engaged “in widespread deception, with no supervision and no repercussions” when handling legal proceedings against customers. 

JPMorgan said in September that it had taken steps to address issues cited by the OCC, including bringing a halt to credit-card collections litigation. The issues affected fewer than 1% of Chase customers, the company said at the time. 

  • Aimee Picchi

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