Robosigning Credit Cards: The Next Scandal

A friend forwarded me a brilliantly written blog post, that posed a very important question - Could the 'Robosigning' of credit cards be the next big bank scandal? Even bigger than the mortgage crisis?

You can read the entire article by clicking here... or here are some of the highlights, the cliff notes version, if you are short on time:

• Robosigning consists of blatantly illegal practices in which banks and mortgage companies had their employees sign affidavits and other documents without verifying the information therein; forge signatures on documents; backdate documents; falsely notarize documents; create new documents to replace missing ones; or some combination of all the above. Did I mention that all of this is illegal?

• The companies that did this claimed that they had to cut corners because they couldn’t keep up with all of the paperwork created by the housing boom last decade. But we now know that this is not true — there’s evidence that robo-signing goes back all the way to at least 1998.

• So in short the widespread and systematic robosigning of mortgage documents have created a real unresolved nightmare. And now there are indications that similar issues may exist within the credit card industry. Consider the very curious behavior of JP Morgan Chase, as reported in that little-noticed American Banker article from last week:
  

  JPMorgan Chase & Co. has quietly ceased filing lawsuits to collect consumer debts around the nation, dismissing in-house attorneys and virtually shutting down a collections machine that as recently as nine months ago was racking up hundreds of millions of dollars in monthly judgments.

  When a bank leaves money on the table for no obvious reason, you know that something’s not quite right. 

Posted in bank scandal , credit cards , jp morgan , robo signing