Owing debt you can’t pay is a bad enough feeling. But when you are being harassed to pay debt you’ve already paid off, debt that has been discharged in bankruptcy, or even debt you never owed at all, the feeling goes from bad to frustrated and even angry.
These feelings are now being compensated by one of the biggest names in credit cards. Debtors, real and imagined, in Ohio and most other states, are entitled to part of the $136 million settlement agreement by Chase Bank as payment for its illegal collection practices.
Over 14,400 Ohio consumers are included in the settlement, only a small percentage of the 528,000 consumers who were wrongfully sued for credit card debt as far back as 2009.
Some of the allegations against Chase were:
- debts were sold to third-party collection companies that were not collectible, some even claims against deceased debtors;
- some of the affidavits supporting the lawsuits were “robo-signed,” meaning that they were signed and sworn to through a process that didn’t even include the person who allegedly signed them; and
- some of the debts were part of bankruptcy proceedings that had already been filed by the debtor and were subject to a bankruptcy stay, meaning that no attempt could legally be made to collect the debt until the stay was lifted.
The creditor also signed and filed proofs of claims in bankruptcy cases swearing that a debt was legitimate without reviewing the actual status of the debt.
In addition to the monetary sanctions, Chase has been ordered by the federal Consumer Financial Protection Bureau to reform its collection procedures. Among those changes is a new system of safeguards to ensure more accurate debt information, as well as a restriction on selling debt to third-party buyers.
Unfortunately, these types of abusive debt collection procedures happen frequently. While every case of creditor harassment may not be worth the millions that Chase has been ordered to pay, these efforts can be stopped or at least require the creditor to comply with laws that protect debtors. If you find yourself being harassed by a creditor for a debt you don’t owe, for a debt that has been included in a bankruptcy filing or just receiving excessive or abusive communications, an attorney with knowledge of lawful collection efforts can help determine whether you have any recourse.
Source: Cleveland.com, “Credit-card giant Chase pledges to change debt collection practices in $136M settlement with Ohio, others,” Robert Higgs, July 8, 2015
