Washington AG stops Chase's unlawful credit card debt collection practices

Chase Bank and Chase Bankcard Services will halt its unlawful credit card debt collection practices as a result of a joint state-federal investigation that found Chase stacked the deck against consumers by pursuing collections cases based on false information. Some instances include listing debt that was the wrong amount, tied to the wrong person, discharged, or time-barred — what’s often called “zombie debt.” Washington will receive $4 million as part of the agreement.

The Washington State Attorney General’s Office was one of the lead states that conducted an investigation of Chase’s debt collection practices from 2009-2014. This ultimately led to the enforcement action being announced July 8.

“Chase’s unfair and deceptive debt collection practices directly harmed 7,000 Washington consumers,” said Washington State Attorney General Bob Ferguson. “With today’s enforcement action, I am holding Chase accountable for breaking the rules, while ending unfair collection efforts against Washington consumers.”

Washington was part of a multi-state investigation, led by Attorneys General in 47 states and the District of Columbia, as well as the federal Consumer Financial Protection Bureau (CFPB). According to the joint state-federal probe, Chase violated the Washington Consumer Protection Act and the federal Fair Debt Collection Practices Act by:

· Subjecting consumers to incorrect account collections activity.

· Selling certain accounts to debt buyers that were inaccurate, settled, discharged in bankruptcy, not owed by the consumer, or otherwise uncollectable.

· Causing inaccurate credit reporting and unlawful judgments that may affect consumers’ ability to obtain credit, employment, housing and insurance in the future.

· Filing lawsuits and obtaining judgments against consumers using false and deceptive affidavits and other documents that were prepared without proper procedures, a practice commonly referred to as “robo-signing.” These practices misled consumers and courts and caused consumers to pay for false or incorrect debt and incur legal expenses and court fees to defend against invalid or excessive claims.

Chase has agreed to cease all collection efforts on an estimated 528,000 accounts, including 7,000 Washingtonians. Chase sued the affected consumers for credit card debts and obtained judgments between January 1, 2009 and June 30, 2014.