JPMorgan gets $136M fine for debt collections

The states are to split about $95 million, while the consumer bureau is to get $30 million, the sources said.

There are more than 50 Chase branches in Rockland and Westchester counties. Nebraska’s share of the settlement is more than $229,000. These are consumers who were sued by Chase over credit card s debt since January 1, 2009.

Ohio is now part of a $136-million settlement with Chase Bank over credit card collections.

The resale prohibition is significant.

“Chase sold bad credit card debt and robo-signed documents in violation of law”, said CFPB Director Richard Cordray in a statement. If initial information about the debt was inaccurate, that could result in long-term harm to the consumer and make it hard or impossible to correct the errors. Separately, the bank is required to provide additional information to consumers who owe debts. Robo-signing refers to signing documents in mass quantities without reviewing records.

Made calculation errors when filing debt collection lawsuits that sometimes resulted in judgments against consumers for incorrect amounts. In 2012 Chase maintained approximately 64.5 million open accounts with $124 billion in outstanding credit card debt.

As part of the deal, the bank will cease collection actions on some 528,000 consumers it won judgments against between 2009 and mid-2014. In 2013 they did note that collection issues affected less than 1 percent of customers, and that it stopped filing collection lawsuits in 2011 and stopped enrolling customers in credit monitoring services in 2012.

The bank also will permanently halt collecting on 528,000 accounts, and it will have to pay a separate $30 million penalty to the Office of the Comptroller of Currency. Approximately $7 million will be paid to New Jersey.

Of that $125 million, about $50 million has been earmarked for restitution, according to sources familiar with the matter.

The CFPB, 47 states and the District of Columbia joined in the settlements, which were first reported by Reuters on Tuesday.

Also, Chase, which could not immediately be reached to comment, allegedly engaged in inaccurate credit reporting, which had the potential to cause consumers future difficulty in obtaining housing, employment, credit and insurance, the statement said.

The subject of the call was not yet disclosed except “to discuss debt collection enforcement action”.

The agreement with the U.S. Financial Protection Bureau, 47 states and the District of Columbia can be announced by Wednesday.

The bank has taken “extensive steps” to resolve the issues, a spokesman said.