Reuters is reporting that J.P. Morgan Chase agreed to pay $125 million to settle claims by 47 states, the District of Columbia and the CFPB that include charges that it used robosigners to sign affidavits in support of credit card law suits, generally suits brought by third party debt buyers. In addition there were claims that Chase sold accounts that had been discharged in bankruptcy, settled or paid by the consumer, or where the consumer had died. In addition to the $125 million split between the feds and the states, $50 million will be paid to customers in restitution.
The CFPB has been looking into the delinquent account selling practices of the other major banks as well. This may be the tip of the iceberg. If you get sued on any bank card, even if it is by a third party collection agency, make sure your lawyer knows about the Chase settlement. Even if the card issuer was not Chase, in opposition to summary judgment, the Chase settlement can be used as an example why the affidavits of the bank should not be taken at face value.
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