A Miami woman alleges in a lawsuit seeking class action status that JPMorgan Chase (JPM) committed widespread abuses in its efforts to collect credit card debt.
It charges that the New York megabank used robo-signed affidavits to obtain default judgments against consumers who had unpaid credit card debt. "Chase has been successful in obtaining default judgments due to this large-scale pattern and practice of fraud and abuse of the legal process," the complaint states.
A JPMorgan spokesman declined to comment on the lawsuit Friday.
The plaintiff in the suit is Ruth Moya, who earns minimum wage as a Walgreens employee, according to the complaint. Moya fell behind on her credit card accounts in 2008 after her husband's business failed, the complaint states.
In a 2010 suit against Moya, JPMorgan obtained an $8,100 judgment. In a second suit, Chase got a $7,400 judgment. The bank relied on robo-signed documents in both cases, according to the complaint filed this week.
The lawsuit alleges that JPMorgan used hundreds of thousands of fraudulent affidavits in cases around the country. The bank did not ensure that the affidavits were accurate, or that they were executed by someone who had personally examined records concerning each borrower's alleged debt, the complaint states.
"Chase has profited from its abuse of the legal system," Shanon Carson, a lawyer who represents Moya, said in a news release.
The allegations of robo-signing in JPMorgans credit-card operations were first leveled by a whistle-blower named Linda Almonte, who worked at the banks credit card litigation support group in San Antonio.
Eventually the Office of the Comptroller of the Currency opened a probe that forced JPMorgan in 2011 to stop suing delinquent borrowers.
Last September, JPMorgan signed an agreement with the OCC that imposes detailed requirements on the banks debt-collection and debt-sale practices. It did not admit or deny wrongdoing, but it acknowledged that it needed to change its conduct.
"Although these issues affected less than 1% of Chase customers, any mistake is regrettable and does not reflect the high standards we set for ourselves," Bill Wallace, JPMorgan's head of operations for consumer and community banking, said in a September 2013 news release. "We are committed to fixing this."
In October, American Banker reported that JPMorgan was disbanding the group in charge of suing consumers to collect delinquent debt.