If you’ve ever been in this position, you know the next move: you run to the kid getting itself killed. Why? Because a sudden silence means there could be something wrong. It doesn’t mean something is wrong, just that there’s a situation that warrants further investigation.
That’s what makes “JPM Chase Quietly Halts Suits Over Consumer Debts” from American Banker about the “silence” of JPMorgan & Co. unsettling. According to the article, in January 2011, JPMorgan Chase filed 640 collection claims in Dade County, Florida,* seeking between three- and twelve-thousand dollars each. By April 2011, JPMorgan Chase stopped filling claims in Dade County altogether. The article also says that Chase’s recoveries went from “$405 million in the first quarter of 2011, … to $321 million in the second quarter and $266 million in the third quarter.”
It is a known fact that banks are organizations that are renowned for their lust for profits. Matt Taibbi said of Goldman Sachs “The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”** This is how banks are reputed to operate. For a bank to abstain from pursuing money is extremely out of character. Do you think that they quit filing claims, and allowed their collections to drop precipitously because their customers all started paying their bills? Or is it for some other, unknown, reason?
The Wall Street Journal’s earlier article “Lender Drops Pursuit of Debt” makes some unsettling reports.
According to the article: “Some judges have complained that J.P. Morgan and other credit-card issuers that go to court to collect what they are owed file lawsuits marred by sloppy or even fraudulent documentation of debts. J.P. Morgan hasn’t been accused of wrongdoing related to credit-card cases in any court filings.”
The article goes on further to mention the claims of whistleblower Linda Almonte, a former J.P. Morgan assistant vice president. Go, read it all, it’s worth it.
JPMorgan Chase is being very closed-mouthed about this. The article in the Wall Street Journal goes on to say that “J.P. Morgan spokesman Paul Hartwick wouldn’t confirm or deny the lawsuit dismissals. In a statement, he said the New York bank considers “our collections strategy to be proprietary.”
Seriously? “Proprietary?” Mr. Hartwick, calling up people and hassling them for money, then suing them is not a secret on par with the Coca-Cola recipe. Variants of your “proprietary” collection tactics are used by, oh, I don’t know… everyone. To respond to rumors this weakly is going to make you sound disingenuous in the extreme.
Naturally, the internet is on orange alert about this. The current suspicion, at least over at The Reformed Broker, is that this may indicate a robosigning scandal in the works, and that the extent of the problem may be pervasive and tremendous in scope. I think it warrants the public’s awareness.
No matter what happens, I will get worried when things are a little too quiet.
* As it turns out, if you don’t pay your credit card bill, the lender may sue you for what you owe, plus whatever they think they can add on.
** My response? A slow clap and an “Aptly put, my good sir.”