Tuesday, December 28, 2010

Robosigning Moves to Credit Cards
Chase is implicated by a whistleblower

If you have been following the robosigning controversy in the mortgage industry, it should come as no surprise that there are allegations of fabricated documents in the credit card industry as well. Linda Almonte, a former Chase employee, is suing the bank for wrongful termination. Also, she has apparently made a whistleblower complaint to the SEC alleging the fraudulent document practices of Chase give rise to liabilities which would/could result in inaccurate financial statements. Here are the allegations in Ms. Almonte's letter to the SEC as published by dailyfinance.com.

1. Chase Bank sold to third party debt buyers hundreds of millions of dollars worth of credit card accounts. . .when in fact Chase Bank executivesknewthat many of those accounts had incorrect and overstated balances.

3. Chase Bank executives routinelydestroyedinformation and communications from consumers rather than incorporate that information into the consumer's credit card file, including bankruptcy notices, powers of attorney, notice of cancellation of auto-pay, proof of payments and letters from debt settlement companies.

4. Chase Bank executivesmass-executedthousands of affidavits in support of Chase Banks collection efforts and those Chase Bank executives did not have personal knowledge of the facts set forth in the affidavits.

5. When senior Chase Bank executives were made aware of these systemic problems, senior Chase Bank executives -- rather than remedy the problems -- immediatelyfiredthe whistleblower and attempted to cover up these problems.

If you are litigating a collection defense case on a Chase account, you should read the complete Almonte letter to the SEC, published here. It describes in detail the review process that the accounts should go through and the defects in the system that were the subject of the whistleblowing claims.

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