Vermont Business Magazine Chase Bank USA NA and Chase Bankcard Services Inc have settled consumer protection claims with Vermont Attorney General William Sorrell and 47 other state attorneys general and the Consumer Financial Protection Bureau. Under the settlement, Chase is required to make significant changes to its debt collection practices, cease collections efforts on more than 500,000 consumer accounts nationally, and will make a $110,000 payment to the State of Vermont.
“Vermont consumers deserve to be dealt with honestly and legally. This settlement will require significant steps be taken by Chase and should be a wake-up call for other debt collectors who do business in Vermont and around the country,” Attorney General Sorrell said.
The joint state-federal investigation into Chase’s credit card debt collection practices revealed that Chase at times attempted to collect debts from the wrong consumers, incorrectly stated the amount owed, or pursued so-called “zombie debt” (debts that had been satisfied, expired, or were very old). Chase’s practices also included the use of automated “robo-signing” to improperly verify debts, misleading consumers and the courts about the accuracy of their information. By pursuing the collection of credit card debts with this inaccurate information, Chase’s collections activity resulted in consumers receiving inaccurate credit reporting and being subjected to unlawful judgments that may have affected consumers’ ability to obtain credit, employment, and housing.
Under the settlement, Chase will significantly reform its debt collection practices. Chase will implement new safeguards to ensure that all debt information is accurate, correct any inaccurate information, provide additional information to consumers who owe debt, and bar any debt buyer who purchases debt from Chase from reselling that debt. Chase will also cease all collection efforts against more than 500,000 consumer accounts. Chase will notify the affected consumers, and will request that the credit reporting agencies not report any judgments related to those debts.
Chase has also established a $50 million consumer restitution fund to compensate consumers who were deceived into paying amounts greater than they owed, and will pay $136 million total to the federal government and the participating states and the District of Columbia, $110,000 of which will be paid to the State of Vermont. Fewer than 300 Vermonters were adversely affected by Chase’s practices.
Vermont AG: July 8, 2015