JPMorgan Chase & Co. has ceased filing lawsuits to collect consumer debts around the nation, dismissing in-house attorneys and virtually shutting down a probably criminal enterprise that as recently as nine months ago was racking up hundreds of millions of dollars in monthly judgments.
Court records in the major cities in five states shows that Chase collection suits have virtually disappeared. In a sixth state, Illinois, contract attorneys continue to file small-dollar cases, though at a reduced rate.
It is unclear whether Chase has stopped pursuing collection on many claims nationwide, or if intends to pursue the debts in some other fashion. The bank has not explained its apparent moratorium and declined comment.
Chase's halt does, however, follow scattered defeats in state courts and a whistle-blower's allegation that it falsely overstated the balances of thousands of delinquent accounts it sold to a third party. Former Chase employees and debt collection experts insist that the bank would not have abruptly retreated from its collections efforts in the absence of trouble.
In a sign that Chase acted with urgency, numerous regional collections teams were fired in mid-2011 at the order of the New York bank's headquarters, according to people familiar with the events.
Chase collections cases have dropped off sharply in Illinois in recent months, in addition to disappearing in five other states, an American Banker review indicates. The review focused on California, Florida Maryland, New York and Washington, where local court records are electronically searchable.
In Dade County, Florida, which includes Miami, Chase filed 640 collections claims in January 2011, most seeking between $3,000 and $12,000. On Jan. 4 alone it filed suits seeking over $200,000, which represents a rate of $50 million annually.
But in April of last year, Chase ceased filing claims altogether in Dade County. That month, The Wall Street Journal first reported that Chase had dropped "more than a thousand" consumer debt cases around the country. Some contract attorneys cited documentation irregularities for the move, the paper reported.
In its response, Chase did not dispute inaccuracies in the debt balances and documentation. Instead, it said its sales agreement allowed for errors and thus was proper. "[T]he parties explicitly agreed that the judgments were purchased 'as is' and "with all faults," Chase's attorney wrote.
Chase was unsuccessful in getting the case dismissed and settled it on undisclosed terms last April; it ceased filing new consumer debt lawsuits in many states the same month.
Should Chase stop pursuing such claims for any reason, the move could prove costly. The threat of litigation has an unquantifiable but significant influence on consumers' decisions to pay off their debts. What's more, even partial recoveries can be substantial and may already be declining as the result of Chase's pullback. After recouping $405 million in the first quarter of 2011, Chase's recoveries fell to $321 million in the second quarter and $266 million in the third quarter.
Robo-signing, or the high-volume production of signed legal documents, has been a key element of the governmental and media foreclosure reviews. Chase's current pullback raises at least the possibility that at least some banks may have documentation problems in other business lines.
Robo-signing: An employee of a mortgage servicing company that signs foreclosure documents without reviewing them. Rather than actually reviewing the individual details of each case, robo-signers assume the paperwork to be correct and sign it automatically, like robots.
In the third and fourth quarters of 2010, a robo-signing scandal emerged in the United States involving GMAC Mortgage and a number of major U.S banks. Banks had to halt thousands of foreclosures in numerous states when it became known that the paperwork was illegitimate because the signers had not actually reviewed it. While some robo-signers were middle managers, others were temporary workers with virtually no understanding of the work they were doing.
400 Occupiers Detained
Occupy Oakland's building occupation, an act of civil disobedience, was disrupted by a brutal police response Saturday 28. Protesters were met with baton strikes, shot with rubber bullets, and exposed to tear gas along the route. Police immediately issued denials that tear gas was used; however, as many victims can attest, it was used freely and without regard to safety of the diverse crowd, which included families and children.
Later, in a subsequent attempt to Occupy an abandoned building in downtown Oakland, Oakland police arrested about 400 demonstrators. Many were reported injured as police used batons to herd protesters into a kettle in front of the YMCA.
The Oakland Police Department (OPD) and City have issued several false claims that need to be rebutted. OPD claim that there was no tear gas used, a fabrication easily refuted by video shot by protesters. Police also claim that several officers were injured by protesters—again, there is absolutely no evidence of this claim, which is made at every demonstration and subsequently proven to be baseless. Protesters kettled in front of the YMCA, fled into the building, aided, at first by employees there.
They did so to escape police, herding protesters against the walls of the building with baton-strikes. As always, police justify their actions by claiming that protesters attacked them or are a danger to others. But there are no reported injuries to police from protesters; a wedding party felt so unthreatened by Occupy Oakland, that it continued to have a reception in an art gallery in the plaza throughout the night.
City Administrator Deanna Santana and Police Chief Howard Jordan have made their intentions clear in the press statement released on Friday night. They intend to manipulate the law to intimidate protesters, implying that acts of civil disobedience and freedom of assembly are criminal, and targeting assumed leaders regularly with unannounced warrants for invented charges.
These actions from the OPD come at a time when the city of Oakland is laying off hundreds of workers, and following millions of wasted dollars in similar brutal police actions.
Residents of Oakland will not continue to stand for this behavior and Occupy Oakland is undeterred by such repression.
February 6th as a day of Action against police brutality and arrests
Occupy Oakland has faced heavy police repression since its inception. From the first police raid on October 25th, when the camp was violently destroyed and people were brutally tear gassed and shot with rubber bullets, to the recent targeted snatchings and arrests of the last couple weeks, and finally to the attack on Occupy Oakland in its attempt to move into a vacant building which manifested itself in tear gas, rubber bullets, assault grenades and the mass arrest of up to 400 people on January 28.
Oakland’s Police Department and City Government have made it clear that they will continue to target and repress those in Occupy Oakland in the attempt to squash the movement that challenges their exploitation, and oppression of the people of Oakland and the 99%.
Often those arrested have had their charges dropped after spending several days in jail due to lack of evidence. The newest tactic being used by the state is stay away orders, given to those arrested, making it illegal for those arrested to be in the vicinity of Oscar Grant Plaza essentially making it illegal to participate in future Occupy Oakland events. Many of these people have been around since the beginning of occupy and are key organizers for different committees and actions.
While many members of occupy have come to support those arrested at arraignments, picked people up from jail when they were released, called local officials or marched in solidarity with those who have been repressed, Occupy Oakland has yet to have a chance to present our side of the facts in court. Feb 6th will be Occupy Oakland’ s day for that.
On this day, it will be the first time that lawyers working with Occupy will be able to argue against the repressive tactics used by the OPD and present evidence of unlawful activities and arrests.
--} Occupy Oakland