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Credit card debtors may have been victimized by "robosigning"

Readers in the San Diego area have likely heard the term "robosigning." The term refers to the unethical practice of a bank signing off on financial documents without first verifying the details or having an employee review them. The problem saw a lot of attention during the widespread foreclosure wave that affected nearly every corner of the country in the last several years, recently resulting in a $25 billion settlement between 49 states and five of the nation's largest lenders, including JP Morgan Chase.

However, new allegations have recently surfaced that JP Morgan Chase may have also engaged in this practice in their credit card collection efforts, and that could land the national bank in hot water.

The real problem is that a bank will claim an individual owes more credit card debt than the outstanding balance. When this happens, the consumer's credit rating can be seriously threatened. The effects can be felt long after an outstanding debt has been paid.

Chase has many branches in the San Diego area, and California residents may have extensive dealings with the bank, including credit card accounts.

Casting an even darker cloud over this issue are the allegations that the Chase collections department may even be actively destroying incoming records that favor the debtor, such as records of past payments made. The allegation harkens back to the worst of the foreclosure crisis and may concern anyone in southern California who is looking for a fresh start from credit card debt.

The pressure of such debt can certainly be crushing, leading to creditor harassment and even bankruptcy. The recent allegations against JP Morgan Chase could seriously affect San Diego citizens, and residents who believe they may have been victimized by fraudulent bank practices would be wise to consider all of the available legal options.

Source: Time, "Robosigning Redux? Regulator Probes Chase Over Credit Card Collections," Martha C. White, March 15, 2012

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