U.S. banking giant JPMorgan Chase & Co. (NYSE:JPM) says it found mistakes in 9 percent of the 1,000 lawsuits it filed against credit card customers for nonpayments, according to the Wall Street Journal.
The bank concluded that the mistakes were small and had “minimal” affect on customers, but "any rate above zero is high," a person familiar with the bank’s internal review told the newspaper in a report published Wednesday.
The news comes after the state of California filed a lawsuit against JPMorgan in May, accusing it of a practice known as “robo signing” legal documents affecting about 100,000 credit card customers. The practice, aimed at expediting legal action against consumer-debt defaulters, involves approving legal documents without proper review to ensure the accuracy of their claims.
JPMorgan stopped suing credit card customers in 2011 after allegations emerged that its mortgage unit had been signing off on foreclosures without properly reviewing the underlying legal documents.
In the case of credit card lawsuits, the review found that some of the legal documents drawn up by outside law firms listed the amounts owed by customers as higher than their actual balances. The bank decided to review a sample of 1,000 cases as part of a wider internal review of its collections-litigation practices.
The Office of the Comptroller of the Currency, which regulates banking operations, could use this review to demand that the bank engage in a more thorough investigation to identify customers who might require compensation.
Angelo Young is a general assignment business reporter who joined IBTimes in April 2012. Much of his career has been behind the scenes as a copy editor, assignment editor and...