As part of a $136 million state-federal settlement over credit card debt collection practices, Chase Bank USA NA and Chase BankCard Services Inc. will pay roughly $6 million in restitution to 5,300 New York customers and the bank will be required to reform its collection practices going forward.
In an announcement of the settlement Wednesday, New York state Attorney General Eric T. Schneiderman said investigators in a multistate and federal probe found Chase engaged in unlawful debt collection practices, including inaccurate credit reporting, calculation errors and subjecting consumers to collections for accounts that were not theirs.
“There has to be one set of rules for everyone, no matter how rich or how powerful, and that includes the biggest multinational financial institutions,” Schneiderman said. “Chase”™s consumer credit card debt collection practices were harmful to families when it pursued collections cases based on false and outdated information. In some cases the listed debt was the wrong amount, was associated with the wrong person, had previously been discharged or was a time-barred or very old ”˜zombie”™ debt.”
As part of the settlement, Chase also agreed to cease collection efforts for more than 528,000 customers nationwide that it sued for credit card debts between 2009 and 2014, including an estimated 5,300 in New York. An additional $11.3 million will be paid to New York state.
In a press release, Schneiderman said the settlement also requires Chase to prevent future credit card debt resales by debt buyers.
The investigation involved attorneys general in 47 states and the District of Columbia, and the Consumer Financial Protection Bureau.
