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Robo-Signing Scandal Now Includes Your Credit Card Debt

by on February 8, 2012

Robo-Signing Scandal Now Includes Your Credit Card Debt

Have you ever been unfairly sued by Chase Financial Services for your unpaid balance? You might have a stronger case for dismissing the lawsuit than you think. This past Tuesday, American Banker reported that JPMorgan Chase and Co. just happened to quietly, unobtrusively and completely stop issuing new credit card lawsuits. While that doesn’t seem like much help to anyone who is currently fighting Chase in court, the implications of the decision are interesting.

Why would Chase suddenly dismiss all of their in-house lawyers, who, just months ago, were earning the banking giant hundreds of millions of dollars in delinquency judgments and then pawning them off to third-party collectors? Well, there could be a couple of reasons.

It could have something to do with the fact that state courts around the country are dismissing many of Chase’s claims due to sloppy or fraudulent paperwork.

It could also be related to the robo-signing scandal currently plaguing JPMorgan’s mortgage division. You know, the one where they illegally foreclosed on thousands of homes, many belonging to military families, by getting hair stylists and assembly-line workers to mass-approve stacks of foreclosure applications without reading them first?


If we had to guess, though, we’d say that Chase’s sudden shift in attitude probably has something to do with a former JPMorgan credit card vice president who, late last year,  accused the company of robo-signing thousands of judgment accounts in order to hastily collect on credit card debt.

Now, we’re not saying that JPMorgan Chase’s credit card lawsuit pullback is an admission of guilt. That’s not it at all. When JPMorgan Chase was forced to halt more than 50,000 foreclosures due to “flawed processing,” that was an admission of guilt. Quietly killing off a division that was reportedly doing the same thing to credit card customers is more like a pre-emptive strategy.

As University of Illinois law professor Robert Lawless told a Senate panel, “Credit card collections may have replicated the robo-signing problems in the mortgage servicing industry. Indeed, given that many of the same players are involved and that credit card debt is sold in ways that is similar to mortgage debt, it would be surprising if the debt collection industry did not have robo-signing problems.”

So if you’ve been the victim of one of these lawsuits, which could be fraudulent, what can you do? First, find a good lawyer. Discuss your case and re-examine the paperwork that JPMorgan used against you in court. If your case is currently in progress, then you’ve got a handful of not-so-circumstantial evidence you might be able to use for your defense. If your case has already been decided, then you can investigate filing an appeal.

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