The lawsuit filed in Los Angeles County Superior Court claims Chase engaged in widespread, illegal robo-signing, among other unlawful practices, to commit debt-collection abuses against credit-card borrowers over at least three years.
“Chase abused the judicial process and engaged in serious misconduct against California credit card borrowers,” Harris said in a news release. “This enforcement action seeks to hold Chase accountable for systematically using illegal tactics to flood California’s courts with specious lawsuits against consumers. My office will demand a permanent halt to these practices and redress for borrowers who have been harmed.”
Chase spokesman Paul Hartwick said the bank would make no comment Thursday.
Chase from January 2008 through April 2011 filed thousands of debt collection lawsuits every month in California – including 469 such suits on one day alone. The lawsuit alleges that to keep up this pace, the bank “cut corners in the name of speed, cost savings, and their own convenience, providing only the thinnest veneer of legitimacy to their lawsuits.”
For example, Chase is accused of illegally “robo-signing” various court filings, including sworn documents, declarations, and verified complaints, without reviewing the relevant files or bank records or even reading the documents before signing.
The lawsuit also accuses the bank of failing to properly serve notice of debt collection lawsuits against consumers while claiming they had been served as required by law – a practice sometimes called “sewer service” which results in the consumers not even knowing they’ve been sued.
And the lawsuit claims Chase haphazardly assembled its official legal filings – for example, failing to redact consumers’ personal information in attachments to filings, potentially exposing them to identity theft and in violation of California law. Also, when asking courts to enter default judgments against consumers, Chase consistently swore under penalty of perjury that the consumers weren’t on active military duty when in fact the bank hadn’t actually checked.