California Attorney General Kamala Harris is suing Chase over alleged abuses of consumers and the court system in order to collect on delinquent credit card accounts.
From the New York Times:
Now the regulatory spotlight is swinging from mortgages to credit cards. The problems in credit card lawsuits play out in the shadows, judges say. That is because unlike in foreclosure cases, borrowers sued over credit card debt rarely show up to defend themselves. As a result, more than 95 percent of lawsuits result in a default judgment, an automatic victory for the lender.
Armed with a default judgment, lenders can garnish a consumer’s wages or freeze bank accounts to get their money back.
Sometimes borrowers do not even realize that they have been sued until a lender wins a default judgment, consumer lawyers say.
Post-recession, credit card lenders have made investments in technology and staffing to work through the tremendous backlog of delinquent card accounts. Issuers’ concerns are now shifting to compliance and documenting their practices in this heavily regulated activity.
Click here to read more from the New York Times.
