NEW YORK (7/8/13)--JPMorgan Chase has halted most of its sales of consumer credit card debt to collection agencies, indicating more sales would further damage its reputation on its collections practices and that it didn't want to give regulators more reason to probe its practices, according to Bloomberg News (July 1).
Bloomberg said court records indicate third-party collectors' lawsuits over Chase debts have dropped significantly since January, but sources disagree on whether sales stopped completely or were restricted.
The nation's largest bank has come under increasing scrutiny over how it pursues payments from credit card customers who fall behind in paying their debts. Two years ago, the bank stopped filing its own credit card collection lawsuits amid rising pressure.
In May, the bank was sued by California Attorney General Kamala Harris over "procedural shortcuts" and illegal robo-signing it allegedly took to sue thousands of borrowers. Also, since 2011, the Office of the Comptroller of the Currency has been looking into the collections practices of the bank. JP Morgan is expecting a formal enforcement action stemming from nonmortgage consumer collections practices, said Bloomberg.
The Consumer Financial Protection Bureau, which now oversees large debt collectors, began examining such practices earlier this year.