Chase Under Fire From OCC About Credit Card Collections

by Mercator Advisory Group 0

A probe of Chase credit card collections operations highlights the challenges of collections processing and related account litigation as the bank sought to cope with the rising tide of cases during the depths of the recession.

The process flaws sparked a regulatory probe by the Office of the Comptroller of the Currency and forced the bank to stop suing delinquent borrowers altogether last year.

The bank’s errors could call into question the legitimacy of billions of dollars in outstanding claims against debtors and of legal judgments Chase has already won, current and former Chase employees say.

The focus of the investigation appears to be on practices in the San Antonio Credit Card Litigation Support Group.

Few details of the OCC’s investigation are available, but current and former Chase employees confirm that staffers from the agency’s enforcement division spent two months gathering information in the San Antonio facility late last year. A person familiar with the OCC’s review says that the regulator is taking the situation very seriously.

Among the problems noted in this detailed article are the difficult data interfaces between multiple IT systems handling delinquent accounts, the documentation of delinquent accounts, and the use of outside litigation support.

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