California Sues JP Morgan Chase Over Debt Collection Practices (JPM)
On Thursday, the California attorney general filed a lawsuit against financial services giant JP Morgan Chase & Co. (JPM), claiming that the bank used illegal tactics to collect debts from over 100,000 credit card holders in the state.
“At nearly every stage of the collection process, defendants cut corners in the name of speed, cost savings, and their own convenience, providing only the thinnest veneer of legitimacy to their lawsuits,” the complaint says.
The complaint claims that JP Morgan and its related affiliates used to scrupulous ways to expedite the collection process, rather than actually reviewing the files. These tactics helped the company file 469 debt recovery lawsuits in one day; on average the company’s lawyers filed 100 collection lawsuits per share.
Furthermore, the lawsuit states that JP Morgan did not properly notify its customers regarding the lawsuits and collections, even though the company made it seem like they notified customers as required by law.
Overall, the California attorney general claims that JP Morgan handled the debt collection process poorly, using the short cut procedures that risked its customers to identify theft and unnecessary losses.
Attorney General Kamala Harris’ office said its wants JP Morgan to be fined $2,500 for each violation of state law, plus an additional $2,500 for each violation that involves a senior citizen or disabled person.
This lawsuit is the first of its kind in the United States.
JP Morgan shares were down a fraction during pre-market trading on Friday. The stock is up +11.53% year-to-date.
The Bottom Line
Shares of JP Morgan (JPM) have a dividend yield of 3.10% based on last night’s closing price of $49.04 and the company’s annualized dividend payout of $1.52 per share.
JP Morgan Chase & Co. (JPM) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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