JPMorgan Chase has agreed to pay $50m to settle charges of abusive credit card debt collection practices against tens of thousands of people in California.
The settlement also includes $50m in restitution for consumers nationwide, including $10m for California customers, California Attorney General Kamala Harris said in a statement.
Harris sued the bank in May 2013, alleging it of trying to collect incorrect sums, selling bad credit card debt, engaging in robosigning of thousands of court documents, and improperly securing default judgments against military personnel.
The attorney general alleged that from 2009 to 2013, the bank filed over 125,000 credit-card collection lawsuits against consumers based on illegally robo-signed sworn documents that were not reviewed adequately.
The lender also sold zombie debts to third-party collectors including accounts that were inaccurate, settled, discharged in bankruptcy, not owed, or otherwise not collectible, as well as sent letters to consumers containing illegal threats, Harris further alleged.
The judgment requires the bank to document debts prior to filing credit card collections lawsuits or selling credit card debts to debt-collectors, and also prohibits the bank from robo-signing court and other documents. The bank has also been directed to permanently stop all attempts to collect, enforce in court, or sell over 528,000 consumer accounts worth hundreds of millions of dollars.
"Abusive and illegal debt-collection practices will not be tolerated in California. This settlement provides real relief to tens of thousands of Californians, including service members, and prevents JPMorgan Chase from continuing these deceptive and illegal debt-collection practices," Harris said in a statement.