August 23, 2012

JPMorgan Chase Credit Card Collections - Robo signing

One of Chase's most prolific affidavit signers was Ruben Alcaraz, one of three San Antonio liaisons with the in-house collections attorneys, court filings indicate. By law, collection affidavits require the signer to be familiar with the bank's pertinent records. "Based upon my review of the Plaintiff's books and records of Defendant's account(s), I have personal knowledge of the facts set forth in the attached pleading," states one Pennsylvania card-debt affidavit signed by Alcaraz. "This verification is made subject to the penalties of [Pennsylvania law] relating to unsworn falsification to authorities."

Numerous former employees say that Alcaraz and his colleagues rarely if ever reviewed such files. They routinely signed stacks of affidavits on flights and in meetings, which in some cases were attended by Helaire, Lazinbat and Chase compliance staffers. Nobody objected, Almonte and others say. Alcaraz also describes himself in the court documents as an "officer of the bank" and an "Assistant Treasurer." High-level Chase management had instructed the staff to stop signing documents using such titles around the middle of the last decade, four Chase sources say. But Lazinbat ordered them to do it anyway. An operator for Chase's internal switchboard identified Alcaraz as a "business analyst."

It gets better. In March of this year American Banker reported that JPMorgan Chase sold $200 million of bad debt to collection agencies without actually providing any proof of that debt - you know those infuriating calls that come up as "unknown caller" you get twenty times a day when you're sitting down to dinner, at your desk, riding in your car, on a date, just getting up, etc.

As the originators of credit card loans, banks are at the headwaters of the rivers of bad debt that flow into the collections industry. Over the last two years, Bank of America has charged off $20 billion in delinquent card debt. The bank settles or collects a portion of that itself and retires other accounts when borrowers go bankrupt or die. An undisclosed portion of the delinquent debt gets passed along to collectors. Once sold, rights to such accounts are often resold within the industry multiple times over several years.

Much like the anti-homeowner/moral hazard argument that always seems to come up around these topics, I'm anticipating that we'll hear a flurry of comments about how irresponsible borrowers brought this on themselves and if everyone just paid their bills on time and read their contracts none of this would have ever happened. To that argument I submit that the deck is stacked against the consumer. I have seen due dates change at the drop of a hat, fees mysteriously appear on statements and balances more than triple in a matter of months. There is no such thing as an even playing field and for the most part the other side cheats.

www.huffingtonpost.com


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