JPMorgan Chase & Co. agreed to a $4.4 million settlement last week with a group of interrelated Florida law firms that the state's attorney general said defrauded thousands of consumers with bogus promises to settle their credit card debts.

The New York banking company agreed to release the credit card debts of approximately 13,000 customers as part of the settlement.

Chase Card Services in February 2008 sued the Broward County law firm Hess Kennedy Chartered LLC, and several affiliated companies, for engaging in allegedly fraudulent debt-settlement activities.

The Florida Attorney General's office separately pursued its own investigation and lawsuit.

Representatives of Hess Kennedy allegedly told consumers that their creditor had violated Fair Credit Billing Act, then sent notices to creditors disputing all charges.

Consumers, who paid 15% to 25% of their total debts as up-front fees to Hess Kennedy, were told to no longer pay their creditors.

That prompted numerous lawsuits and other actions by creditors.

"This firm was flagrant in the way it diverted consumers' payments," said Beth Moskow-Schnoll, a partner with the law firm Ballard Spahr Andrews & Ingersoll, which represented JPMorgan Chase.

Hess Kennedy is in court-ordered receivership, and Laura L. Hess, its principal, has been disbarred in Florida for five years.

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