JPMorgan Chase & Co. has dropped more than a thousand collection lawsuits across the U.S. that sought to recover bad credit card loans from borrowers.
The average amount sought in the card lawsuits is roughly $1,000, the Wall Street Journal first reported, citing some judges scheduled to decide the cases.
The bank’s collection strategy is proprietary and Chase officials declined to share more information about the decision to drop the suits.
The nation's second-largest bank by assets, including more than $100 billion in credit card accounts, would not disclose the exact number of cases dismissed or the reasons for the move. The lawsuits were targeting borrowers in California, Florida, Illinois, New Jersey and New York.
In those five states, Chase was owed $45.9 billion on outstanding credit cards as of March 31, including both current and delinquent accounts.
Thomas Donnelly, an Illinois state-court judge in Chicago, said lawyers for Chase asked to withdraw all the pending collection cases in his courtroom this month, without explaining their decision. He allowed the bank to dismiss the cases without prejudice, meaning Chase can refile them later, according to the Wall Street Journal report.
At least for now, though, the borrowers will not be subject to one of the most effective collection tools. Roughly 94% of collection cases filed against borrowers result in default judgments in favor of the lender, according to industry estimates.
