The American state of California is suing JPMorgan Chase, accusing the Wall Street bank of illegally abusing credit card customers and abusing the court system to harass them with aggressive lawsuits.
California Attorney General Kamala Harris filed the suit in Los Angeles Superior Court, alleging the bank “committed debt collection abuses against tens of thousands of California consumers”.
“Defendants have flooded California’s courts with collection lawsuits against defaulted credit card borrowers based on patently insufficient evidence – betting that borrowers would lack the resources or legal sophistication to call defendants’ bluff,” Ms Harris said in the filing.
The bank filed more than 100,000 lawsuits against credit card holders between January 2008 and April 2011, and on one day alone, April 1, 2010, it filed 469 cases, the state alleged.
The top California law-enforcement official accused JPMorgan of illegal robo-signing, the practice of signing documents in mass quantities without determining their accuracy, and other unlawful practices to send a tsunami of debt-collection lawsuits into state courts.
The bank allegedly used California’s judicial system as a mill to obtain default judgments and garnish wages from Californians.
JPMorgan must be held “accountable for systematically using illegal tactics to flood California’s courts with specious lawsuits against consumers”, Ms Harris said in a statement.
“My office will demand a permanent halt to these practices and redress for borrowers who have been harmed.”
JPMorgan Chase did not have an immediate response to the charge and declined our invitation to make comment on the matter.