Lawmakers Ask Chase to Explain Sudden Spike of Lawsuits Against Credit Cardholders

Chase has recently ramped up lawsuits against credit card customers. A very small number of lawsuits was first filed in 2020, but last year the number of lawsuits increase tremendously. 

Chase sued more than 800 credit card customers around Fort Lauderdale, Florida, last year after suing 70 in 2020 and none in 2019. In Westchester County, in New York’s suburbs, court records show that Chase has sued more than 400 customers over credit card debt since 2020; a year earlier, the equivalent figure was one. A similar surge is occurring in Texas, where Chase filed more than 1,000 consumer debt lawsuits around Houston last year after filing only seven in 2020. Chase instigated 141 consumer debt cases in Austin last year after filing only one such case in 2020. The numbers were first reported by ProPublica and January Advisors.

Now five members of the Senate Banking Committee and its chairman, Sen. Sherrod Brown of Ohio, have signed a letter asking Chase for explanations about the sudden spike in these lawsuits.

The letter notes states that the senators in questions are deeply troubles that Chase “has renewed its predatory practice of robo-signing purported evidence of credit card debt to sue customers during the pandemic.”

The practice first resumed after the January 1, 2020 expiration of Chase’s consent order with the Consumer Financial Protection Bureau. Chase had stopped pursuing credit card lawsuits nearly a decade ago when regulators found that the bank’s legal paperwork was often faulty. 

At the height of the robo-signing scandal following the 2008 financial crisis, the CFPB found that Chase wrongfully sued thousands of customers for debt they did not owe. “Robo-signing” is the practice where important documents are reviewed and signed by individuals with little to no knowledge about the case and proper procedures are not followed. From 2009 to 2013, the CFPB estimated that the error rate in robo-signing cases in which Chase obtained a judgement against consumers reached approximately 9%. In 2015, the CFPB issued a consent order prohibiting Chase from engaging in robo-signing and certain debt collections practices that were in violation of the Consumer Financial Protection Act.

The senators have sent Chase a list of question and answers are expected by February 21, 2022.