Iowa is part of a settlement with Chase Bank over its credit card collection practices. A spokesman for Iowa’s Attorney General, Geoff Greenwood, says the company agreed to settle after Iowa and 47 other states alleged their debt collection practices were illegal.
“And then debt buying or debt selling. And that’s where a company or a bank — in this case J.P. Morgan Chase — pursues credit card debt and eventually sells it off to someone else, a debt buyer who pays pennies on the dollar and then goes after the consumer,” Greenwood says.
“What we were finding is that there were consumers who really didn’t owe debt and debt collectors were going after them, or the information was wrong, the amount was wrong. They got the wrong name, there were just a lot of errors and consumers were being pursued for debts that they didn’t owe,” Greenwood says. He says Iowa and other states came together after seeing the problem.
“It’s not acceptable, and this settlement we hope will take care of this problem in the future,” Greenwood says. The settlement for all the states is $136 million.
“What chase is doing in Iowa, it is ceasing its collection efforts against about 1,300 different Iowa consumers,” Greenwood says. “It’s also providing about $43,000 in restitution to about 70 Iowa consumers.” Iowa’s total settlement is $471,000 in a settlement payment and one million dollars for attorney fees.
Greenwood says Iowa’s allocation will be used to enforce consumer fraud laws, including debt collection statutes.