California sues JPMorgan Chase over alleged illegal debt collection

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California's attorney general sued one of the nation's largest banks Thursday, alleging that JPMorgan Chase & Co. used illegal tactics in its debt collection efforts against about 100,000 credit card holders.

The lawsuit filed in Los Angeles Superior Court says the company filed thousands of debt collection lawsuits each month between 2008 and April 2011 using improper practices that shortcut procedures required by California law.

JPMorgan Chase spokesman Paul Hartwick said the company had no comment.

Company spokesmen did not immediately return telephone and email messages requesting comment.

"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. It alleges the company sued borrowers "based on patently insufficient evidence — betting that borrowers would lack the resources or legal sophistication to call defendants' bluff."

Attorney General Kamala Harris' office says the company's methods included "robo-signing" legal documents, a practice that was widely used in mortgage foreclosures until it was outlawed. JPMorgan Chase is one of five major banks that settled with California and other states after the housing market meltdown.

The lawsuit contends that in filing the debt-collection lawsuits, company officials similarly signed legal documents, including sworn declarations, without reviewing the related files and bank records or even reading the documents.

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