The Vicious New Bank Shakedown That Could Seriously Ruin Your Life

JPMorgan Chase and other big banks are accused of running a frightening scam collecting on credit card debt.

Gangsta-style big banks ... may not send a guy to break your kneecaps, but they are working in the shadows, chasing down debts from credit cards using methods that are both fraudulent and unlawful. They do this whether you actually owe the money or not.

After widespread outrage over the big banks’ last crime wave against the American consumer – the “robo-signing” scam in which homeowners were hustled out of their houses by banks that sent fraudulent paperwork through the courts, they are at it again. This time, banksters are accused of helping debt collectors pursue faulty judgments against credit card customers by various dirty tricks that include – surprise! – robo-signing.  

California Attorney General Kamala Harris, who filed suit against JPMorgan Chase last Thursday, says that from January 2008 to April 2011 ... the megabank unleashed over 100,000 lawsuits against consumers over uncollected credit-card debt in the state of California alone.

The lawsuit claims that the bank took a number of little shortcuts, like robo-signing, in which bank employees produce sworn documents and other legal filings without bothering to check bank records or examine cases for accuracy.

Another nasty trick Chase is accused of deploying is what’s known, appropriately, as “sewer service.” This means that Chase failed to properly serve notice of debt collection lawsuits against consumers (it dumped the notices “in the sewer”), but then lied and said it did. This means, you, as a consumer, have no idea that a lawsuit has been launched against you. So here’s what happens: you get a default judgment that automatically favors the debt collector. The credit card company can then garnish your wages or freeze your bank account to get the money it says you owe. And you might not even owe it! Banks are sometimes chasing down consumers who have already paid their debts. Other times they are jacking up the size of the debts by adding bogus fees and interest costs.

All of this, of course, is unlawful. But it’s happening on a massive scale.

Of course it’s not just JPMorgan Chase. Citigroup, Bank of America and other big banks are in on the action. The big banks work as an oligopoly, so if one bank gets away with a scam, the others quickly jump on board. [emphasis mine]

Am I glad I don't have any credit cards.

Tags: unlawful credit card debt lawsuits

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