Chase Bank has been required by the Consumer Financial Protection Bureau and agencies in 47 states to institute debt collection reform measures. Part of that reform involves refunding millions to customers in a restitution settlement related to illegal debt collection measures. The bank might also be required to pay fines or other fees to various agencies.
Chase also agreed to make significant changes to its collection procedures. One change the bank must make is to put procedures in place to ensure all collection information is correct. Consumers who owe debt must be provided with appropriate information.
One big component of the agreement relates to the buying and selling of debts. Companies can still buy old or uncollected Chase debts for a fraction of the owned amount, but they are barred from reselling that debt to third-parties later. In the past, buyers who purchased debt might resell it at a later time; the debt could be resold again and again. Inaccurate information involved in the process would be resold so many times, it became impossible or very difficult to correct it, causing many problems for consumers.
During the investigation into Chase debt collection processes, several unlawful debt collection processes were discovered. Consumers were put into collections for balances and accounts that didn’t belong to them or were otherwise inaccurate. Judgements were received through inaccurate statements and incorrect processes. Lawsuit documents included calculation errors that inappropriately raised the amount consumers were made to pay.
As part of the settlement, Chase is reportedly making restitution on some of these mistakes. Mistakes can happen regardless of creditor, though. Individuals should pay close attention to their accounts and activity and seek legal assistance when faced with inappropriate debt collections.
Source: New York City Patch, “Chase to Reform Credit Card Debt Collection, Pay $136MM in 47 States,” Lanning Taliaferro, July 08, 2015