Attorney General Announces Suit Against JPMorgan Chase for Fraudulent and Unlawful Debt-Collection Practices
Attorney General Kamala D. Harris of California Announces Suit Against JPMorgan Chase for Fraudulent and Unlawful Debt-Collection Practices. LOS ANGELES — Attorney General Kamala D. Harris today filed an enforcement action against JPMorgan Chase & Co. (Chase) alleging that the bank engaged in fraudulent and unlawful debt-collection practices against tens of thousands of Californians. The suit alleges that Chase engaged in widespread, illegal robo-signing, among other unlawful practices, to commit debt-collection abuse against approximately 100,000 California credit card borrowers over at least a three-year period. “Chase abused the judicial process and engaged in serious misconduct against California credit card borrowers,” Attorney General Harris said. “ This enforcement action seeks to hold Chase accountable for systematically using illegal tactics to flood California’s courts with specious lawsuits against consumers. My office will demand a permanent halt to these practices and redress for borrowers who have been harmed.”
shortcuts to obtain judgments against California consumers with speed and ease that could not have been possible if Chase had adhered to the minimum
substantive and procedural protections required by law. “At nearly every stage of the collection process, Defendants cut corners in the name of speed, cost savings, and their own convenience, providing only the thinnest veneer of legitimacy to their lawsuits,” the complaint states.
Chase used California’s judicial system as a mill to obtain default judgments, the suit alleges, using illegal tactics to flood the state’s court system in
order to secure default judgments and garnish wages from Californians.
The alleged misconduct includes:
• Robo-signing: Chase illegally robo-signed various litigation filings, including sworn documents, declarations, and verified complaints, without
reviewing the relevant files or bank records or even reading the documents before signing.
• “Sewer Service”: Chase failed to properly serve notice of debt collection lawsuits against consumers while claiming they had been served as required by
law. This practice, known as “sewer service,” deprives the consumer of any notice of the lawsuit.
• Filing Irregularities: Chase haphazardly assembled its official legal filings. For example, Chase failed to redact consumers’ personal information in
attachments to filings, potentially exposing them to identity theft and in violation of California law. In addition, when asking courts to enter default
judgments against consumers, Chase consistently swore under penalty of perjury that the consumers were not on active military duty. In fact, Chase never
checked. This deprived service members of important legal protections to which they are entitled while on active duty.
Unlawful Debt-Collection Practices
A copy of the CFPB complaint is available here: http://files.consumerfinance.
Consumer Fraud Lawfirm
ILLEGAL DISCRIMINATORY MARKUP
released a bulletin explaining that certain lenders that offer auto loans
through dealerships are responsible for unlawful, discriminatory pricing.
Potentially discriminatory markups in auto lending may result in tens of
millions of dollars in consumer harm each year, and the bulletin provides
guidance to indirect auto lenders within the CFPB’s jurisdiction on how to
address fair lendingrisk.
“Consumers should not have to pay more for a car loan simply based on their
race,” said CFPB Director Richard Cordray. “Today’s bulletin clarifies our
authority to pursue auto lenders whose policies harm consumers through unlawful
When consumers finance automobile purchases from an auto dealership, the dealer
often facilitates indirect financing through a third party lender. The dealer
plays a valuable role by originating the loan and finding financing sources. In
this indirect auto financing process, the lender usually provides the dealer
with an interest rate that the lender will accept for a given consumer.
Indirect auto lenders often allow the dealer to charge the consumer an interest
rate that is costlier for the consumer than the rate the lender gave the dealer.
This increase in rate is typically called “dealer markup.” The lender shares
part of the revenue from that increased interest rate with the dealer. As a
result, markups generate compensation for dealers while frequently giving them
the discretion to charge consumers different rates regardless of consumer
creditworthiness. Lender policies that provide dealers with this type of
discretion increase the risk of pricing disparities among consumers based on
race, national origin, and potentially other prohibited bases. Research
indicates that markup practices may lead to African Americans and Hispanics
being charged higher markups than other, similarly situated, white consumers.
Today’s bulletin explains how the Equal Credit Opportunity Act (ECOA) applies to
indirect auto lending. The bulletin also provides guidance for indirect auto
lenders on ways to limit fair lending risk. The ECOA makes it illegal for a
creditor to discriminate in any aspect of a credit transaction on prohibited
bases including race, color, religion, national origin, sex, marital status, and
age. The CFPB recommends that indirect auto lenders within its jurisdiction take
steps to ensure that they are operating in compliance with fair lending laws as
applied to dealer markup and compensation policies. These steps may include, but
are not limited to:
Fair Lending Practices
dealer markup policies
part of a robust fair lending compliance program; and
fairly compensating dealers using a different mechanism that does not result in
discrimination, such as flat fees per transaction.
The bulletin is available here: http://files.consumerfinance.
FTC Approves Final Order Settling Charges Against Equifax Information Services LLC
Fair Credit Reporting
Fair Debt Collection
In the recent decision in Anchondo V. Dunn, 2013 WL 599798 (10th Cir., Feb. 19, 2013), the Tenth Circuit affirmed the award of sanctions by the District of New Mexico against defense counsel Steven R. Dunn (“Attorney Dunn”) for failing to disclose insurance coverage of a now bankrupt debt collector, Anderson, Crenshaw and Associates, L.L.C. (“ACA”) .
Credit Report Errors
A Federal Trade Commission study of the U.S. credit reporting industry found that five percent of consumers had errors on one of their three major credit reports that could lead to them paying more for products such as auto loans and insurance.
- One in four consumers identified errors on their credit reports that might affect their credit scores;
- One in five consumers had an error that was corrected by a credit reporting agency (CRA) after it was disputed, on at least one of their three credit reports;
- Four out of five consumers who filed disputes experienced some modification to their credit report;
- Slightly more than one in 10 consumers saw a change in their credit score after the CRAs modified errors on their credit report; and
- Approximately one in 20 consumers had a maximum score change of more than 25 points and only one in 250 consumers had a maximum score change of more than 100 points.
The Law Office of Robert W. Murphy litigates claims on behalf of consumer who have been the victims of inaccurate or obsolete credit reports. If you believe that your credit report has inaccurate or obsolete information please contact our office.
Happy Holidays from Consumer Attorney Robert Murphy
Happy Thanksgiving to all our clients. Give thanks for all that you have and cherish what really maters in life to you. Have a safe holiday vacation and enjoy time with your family. Its not what we say about our blessings , but how we use them, is the true measure of our thanksgiving . If your family is far away don’t forget to send Happy Thanksgiving greetings card, they will surely be thankful. Remember not to eat a big breakfast in order to save room for the turkey and sweet potato pies. We thank you for your business and are very happy that you are our loyal clients.
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Consumer Fraud Attorney
Robert W. Murphy was a recent speaker at the Consumer Issues Conference, Consumer Financial Protection: Who’s in Charge, hosted by the University of Wyoming College of Law in Laramie, Wyoming. Mr. Murphy spoke at length on recent United States Supreme Court and Circuit Court decisions that have impacted consumer class action litigation.
Robert W. Murphy is a Consumer Fraud Attorney in private practice in Fort Lauderdale, Florida, focusing on consumer class action litigation. He presently serves as an adjunct professor of law at the University of Florida College of Law in Gainesville Florida. He is a past chair of the Consumer Protection Law Committee of The Florida Bar and is a Board Member, Secretary and Florida State Chairperson for the National Association of Consumer Advocates. He has spoken at many seminars and conferences hosted by a variety of state and national organizations, including The Florida Bar, The Academy of Florida Trial Lawyers, the National Consumer Law Center, the National Association of Legal Aid and Public Defenders, and the United States Military Judge Advocate Corps as well as college and law schools. In October, 2007 and April, 2011, the Federal Trade Commission designated Mr. Murphy to be panel member for the Fair Debt Collection Practices Act Symposium in Washington, DC, which addressed the rising abuses in the consumer debt collection industry.
Robert W. Murphy, Esq.
Law Office of Robert W. Murphy
1212 SE 2nd Ave.
Ft. Lauderdale, Florida 33316
Telephone: (954) 763-8660