Kansas Attorney General today announced a settlement with Chase Bank USA N.A. and Chase Bankcard Services Inc. that is expected to return millions of dollars to affected cardholders nationwide.
Schmidt joined with attorneys general in 47 states, the District of Columbia and the Consumer Financial Protection Bureau in holding Chase accountable for unfair and deceptive business practices committed while collecting on consumer credit card debt.
Specifically, the states and the CFPB allege that Chase used false and inaccurate affidavits while filing lawsuits and obtaining judgments against credit card consumers and that Chase sold credit card accounts to debt buyers with incomplete or inaccurate information.
The agreement requires Chase to significantly reform its credit card debt collection practices in areas of declarations, collections litigation, debt sales and debt buying. Debt buying involves the sale of debt by creditors or other debt owners, often for pennies on the dollar, to buyers who then attempt to collect the debt at full value or sell it to other buyers. Among other reforms, the agreement requires new safeguards to help ensure debt information is accurate, and inaccurate data is corrected, provides additional information to consumers who owe debts, and bars Chase’s debt buyers from reselling consumer debts to other purchasers.
“Chase’s debt collection practices have harmed Kansas consumers,” Schmidt said. “In several instances, Chase commenced collections proceedings based on information that was just plain wrong. This is bad business practice and an affront to consumers, courts, our laws and fairness.”
Chase has agreed to cease all collection efforts on more than 528,000 consumers, including an estimated 844 in Kansas. Chase sued the affected consumers for credit card debts and obtained judgments between January 1, 2009, and June 30, 2014. Chase will notify affected borrowers of the change and will request all three major credit reporting agencies to not report the judgments.
The agreement also ensures that Chase will fulfill $50 million in consumer restitution through a separate 2013 consent order reached with the Office of the Comptroller of the Currency. Chase estimates that so far it has provided $33,000 in restitution to 35 Kansas consumers.
Kansas consumers eligible for restitution or otherwise affected by the terms of this settlement will be contacted directly by Chase. For additional information, contact the attorney general’s consumer protection division at 800-432-2310 or visit the website at www.InYourCornerKansas.org.