Papers filed by Attorney General Kamala Harris has accused JPMorgan Chase & Co., Chase Bank USA and Chase Bankcard Services of running "debt collection mills," that rush paperwork through with an emphasis on speed, rather than following the letter of the law, which includes protections for account holders, Courthouse News Service reported Tuesday.
"For years, defendants have flooded California's court with collection lawsuits against defaulted credit card borrowers based on patently insufficient evidence," the complaint says. Yet, rather than carefully handling lawsuits against borrowers, the bank has been rushing cases to court with the expectation that the debtors will not show up and the bank can win default judgments.
One practice described in the complaint says debt collection mills falsify documents to show the account holder has been served with court notifications when they have not been served, the state of California said.
The state called the number of abused account holders "staggering."
From January 2008 to April 2011, Chase filed 10,000 lawsuits against defaulting account holders, "an average of more than 100 per day," court papers say.
"Some days were more frenzied than others. For example, defendants filed 469 lawsuits on April 1, 2010, and then followed it up with 226 lawsuits the next day," the complaint says.
The bank did not immediately respond to a request for comment, Courthouse News Service said.