It's no secret that lenders and collectors sometimes use aggressive tactics to collect on debt. Credit card companies are among those lenders, and they have historically used tactics, mailings and phone calls to frighten and harass account holders into paying bills. Sometimes, those bills are doubled or tripled by finance fees and other penalties.
While creditors do have rights and have a legal ability to seek payment, they are governed by a number of regulations to ensure they treat consumers fairly. One major bank is facing enforcement action in 47 states because of what are being called illegal actions to collect on credit card debt.
According to reports, JPMorgan Chase is facing action because of unfairness and possibly deception during credit card collections processes. Some actions cited by the reports includes the fact that Chase used illegally sworn affidavits and other documents to obtain judgements against account holders. They also allegedly helped third-party collectors to obtain similar judgements.
According to reports, Chase failed to prepare truthful statements. The inaccurate statements were used by courts to rule on judgements against consumers. The enforcement action filed in states across the country is requiring Chase to cease collections on debts related to the action. Chase will also have to notify credit reporting agencies so that the inaccurate judgements are not reported on consumer accounts. Finally, Chase must process millions in refunds to consumers who have already paid bills related to the alleged faulty collections process.
Errors in accounts can occur at any level. Whether you are being impacted by a wide-spread problem or are facing a single creditor with an aggressive process, understanding your legal rights and how to protect yourself against creditor harassment is important.
Source: The New York Times, "Calling Off the Credit-Card Debt Collectors," Teresa Tritch, July 09, 2015