You could have predicted it. I could have predicted it. Hell, even Sylvia Browne could have predicted it. Prediction is one thing; Kamala Harris, California's Attorney General is trying to do something about it. As Reuters reports
California's attorney general sued JPMorgan Chase & Co on Thursday, accusing the company of falsely signing documents to unlawfully collect credit card debt from thousands of customers.And as the New York Times elaborates
The lawsuit accuses JPMorgan of engaging in widespread, illegal "robo-signing" of legal documents to commit debt-collection abuses against approximately 100,000 California credit card borrowers.
JPMorgan "flooded California's courts with collection lawsuits against defaulted credit card borrowers based on patently insufficient evidence," according to the lawsuit, filed in Los Angeles Superior Court.
For about three years, between January 2008 and April 2011, JPMorgan filed thousands of lawsuits each month to collect soured credit card debt, Ms. Harris said. On a single day, for example, JPMorgan filed 469 lawsuits...Reuters again:
Sometimes borrowers do not even realize that they have been sued until a lender wins a default judgment... The situation arises... when lenders claim to serve borrowers with notice of a suit... but do not follow through. The practice, called "sewer service," is rampant across the country... Ms. Harris accused JPMorgan of sewer service in her lawsuit.
The company "bet that borrowers would lack the resources or legal sophistication to call its bluff," the lawsuit said.It's a good bet. It's still a good bet, even if California is trying to call JP Morgan on its practices. After all, there's forty-nine other states full of peole to defraud. And we've already seen how much the banks care when they get sued and settle for $26,000,000,000. Not one flying fuck, because they just go back to doing the same criminal activity, considering any resulting fines or settlement monies "overhead." Far better to do the crime and pay the fine than to not do it at all...
The problem isn't just JPMorgan. They all do it, big and litte collectors alike. JPMorgan was just so obscenely flagrant in its practices that apparently they caught the attention of the California Attorney General's office.
What happens when you (don't) get "sewer served," and you (don't) show up in court? The judge has no choice but to issue a default judgement against you. And then your bank accounts can get frozen and your wages garnished. That's in California. In some other states you can get thrown into jail.
Even if you do show up, your chances aren't much better. A stunning essay by Rachel Swan in the East Bay Express details the hopelessness of a debtor facing the California court system.
By the time a debt snowballs that far, the debtor usually has few resources to fight it. Most defendants can barely afford to pay rent or buy groceries, let alone hire a private attorney, and most lawyers won't take a debt case on contingency because current statutes limit them to a paltry $800 remuneration...It's the oldest story in the world. The rich and strong squeezing the last drops of liquid (asset) out of the poor and weak, and turning the law to benefit themselves. As the rich soak up more and more of our resources, less and less is available to attempt even a modicum of relief.
...a debtor might have a perfectly solid defense, but not know how to use it. For example, if someone steals a person's identity and fraudulently uses her credit card, and then the bank sues her for payment, that person might not realize - without the help of an attorney - that she can quickly win the case...
it's extremely easy to prey on self-representing litigants...
... there had been a "dramatic increase" from the 4.3 million defendants who represented themselves in 2004... And because their cases are in civil court - not criminal - the government has no obligation to provide these defendants with an attorney if they cannot afford one.What happens when there's nobody, and nothing, left to squeeze? Perhaps Occupiers were just a couple of years premature.
At this point, court budget cuts have become a Bay Area-wide scourge for low-income litigants... Staff shortages... have created a backlog of temporary restraining orders... But debt collections, which began proliferating in 2008 after the Wall Street crash, are perhaps the saddest indicator of a court system so hobbled by cutbacks that it can no longer serve its population...
"I think that's the business model for a lot of these third-party ((debt collection)) companies like Cache, Midland Funding, and Portfolio Recovery Associates. The hope is that someone will go into default, have no familiarity with the legal process, and not have an attorney to represent them."
Sun May 12, 2013 at 9:52 AM PT: Hat tip! A commenter provided a link to the lawsuit: