JPMorgan Chase has agreed to pay at least $125m to settle probes by US state and federal authorities in connection with its collection and sale of credit card debt.
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The New York-based bank has been accused of depending on robo-signing as well as other discredited methods of collecting debt from consumers that they may not have owed, as well as offering inaccurate information to debt buyers, Reuters reported citing unnamed sources.
The settlement, which will also include nearly $50m in restitution, will be announced by the US Consumer Financial Protection Bureau (CFPB), 47 states and the District of Columbia.
The states are set to secure about $95m, while the CFPB is anticipated to receive $30m.
Mississippi and California, which have pending lawsuits against the bank over debt collection practices, are not expected to reach any settlement at the same time.
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By GlobalDataCFPB directed JPMorgan to refund $309m to nearly two million customers in September 2013 over illegal credit card practices, such as charging consumers for credit card monitoring services they did not receive.
In the same month, the Office of the Comptroller of the Currency also issued a consent order against the lender after detecting wrongdoings in the bank’s sworn document and collections litigation. The order called for changes, including to debt sales.
In that period, the bank stated that collection issues affected less than 1% of customers. Further, the bank said that it had put an end to filing collection lawsuits in 2011 and stopped enrolling customers in credit monitoring services in 2012.
