JPMorgan review finds errors in debt-collection lawsuits: WSJ
(Reuters) - JPMorgan Chase & Co (JPM.N) made mistakes while suing thousands of its credit card customers over non-payments, the Wall Street Journal reported, citing the bank's internal review of its debt-collection process.
JPMorgan examined about 1,000 lawsuits and found mistakes in 9 percent of the cases, the Journal said, citing people familiar with the review.
"Any rate above zero is high," one person familiar with the bank's conversations with regulators told the newspaper. (link.reuters.com/mak59t)
The errors ranged from inaccurate interest and fees applied by outside law firms to a "small number of instances" in which lawsuits listed higher balances than the amounts owed by borrowers.
In certain cases sworn documents were signed without knowledge of their accuracy, according to an internal document reviewed by the Wall Street Journal.
JPMorgan, however, concluded the mistakes it found were "mostly small" and "had a minimal" impact on customers. "We have no reason to doubt" that the principal amounts the bank sought to collect were accurate, the document said.
California's attorney general sued JPMorgan in May, accusing the bank of falsely signing documents to unlawfully collect credit card debt from thousands of customers.
The lawsuit accuses JPMorgan of engaging in widespread, illegal "robo-signing" of legal documents to commit debt-collection abuses against about 100,000 California credit card borrowers.
JPMorgan stopped filing credit card-related lawsuits in 2011 after allegations emerged that employees in its mortgage unit had signed off on large numbers of foreclosures without reviewing the underlying documents.
The bank decided to review its collections-litigation practices following the foreclosure fiasco to determine if it had similar problems elsewhere in its consumer unit, according to the paper.
JPMorgan could not immediately be reached for comment by Reuters outside of regular U.S. business hours.
(Reporting by Sakthi Prasad in Bangalore; Editing by David Cowell)