State Takes on Big Credit in Consumer Protection Showdown

When consumers are faced with harassment and other abuses committed by big banks, the law generally favors consumer protection but such protections can be difficult to enforce. One state has become frustrated enough on behalf of its citizens who are navigating a legally complex and often abusive web of credit card debt that it has said “enough.” California is currently suing banking giant JPMorganChase for allegedly committing “debt collection abuses against tens of thousands of California consumers,” according to the New York Times and state court records.

The state is claiming grounds for the suit based on the fact that JPMorganChase has allegedly flooded California’s civil court system with credit card debt collection lawsuits that are considered to be questionable filings at best. The suit specifically targets credit card debt lawsuits filed by the bank between January 2008 and April 2011. During that time, the bank often filed hundreds of lawsuits per day.

The volume of lawsuits filed is not so worrisome as the alleged practices that JPMorganChase has used in pursuing these suits. The bank allegedly failed to review many of the filings for accuracy, cut corners in illegal ways and generally took advantage of consumers affected by a great many of these suits. In doing so, the bank also took advantage of the state by taxing its court system with incomplete, inaccurate and/or illegitimate filings.

This robosigning suit is perhaps the first of its kind to target banks for credit card collection practices. Previously, such suits were filed as a result of inaccurate, incomplete and/or illegitimate high-volume foreclosure actions. Regardless of how the suit resolves, hopefully California’s choice to pursue it will send a message to bank’s everywhere that they will be held accountable in the court of public opinion as well as courts of law for illegal actions against consumers.

Source: New York Times Dealbook, “California Sues JPMorgan Chase Over Credit Card Cases,” Jessica Silver-Greenberg, May 9, 2013