JPMorgan to reform credit card collection in settlement with U.S., states

(Reuters) - JPMorgan Chase & Co will pay $136 million and reform its credit card collection practices as part of a joint state-federal settlement, U.S. state attorneys general and the Consumer Financial Protection Bureau said on Wednesday.

It will also pay at least $50 million in consumer refunds and $30 million to the Office of the Comptroller of the Currency in a related action, authorities said.

"This is a good, strong settlement that's going to help a lot of people," Iowa Attorney General Tom Miller, who helped lead the probe, said on a conference call with reporters.

An investigation showed the nation's largest bank had subjected consumers to collections for accounts that were not theirs, contained erroneous amounts, or were uncollectible, the authorities said in statements.

Chase relied on robo-signing and other discredited methods to pursue consumers and gave inaccurate information to debt buyers, the authorities said. Robo-signing refers to the signing of mass quantities of documents without reviewing records.

As part of the settlement, Chase agreed to reform the bank's credit card collection practices and debt sales. It also bars Chase's debt buyers from reselling consumer debts to other purchasers, the authorities said.

The CFPB, 47 states and the District of Columbia joined in the settlements, which were first reported by Reuters on Tuesday.

JPMorgan said the settlement related to practices stopped years ago. "We are pleased to resolve these legacy issues and are working to complete our remediation of affected credit card customers," the bank said in a statement.

The states will split some $95 million, while the CFPB will get $30 million, the statement said. Another $11 million will go to the states that led the investigation and settlement negotiations, the attorneys general said.

As part of the deal, the bank will cease collection actions on some 528,000 consumers it won judgments against between 2009 and mid-2014.

The settlement also ensures Chase will refund $50 million to consumers, the attorneys general said.

Many of the same issues were included in a 2013 consent order with the Office of the Comptroller of the Currency.

The bank stopped filing credit card collection lawsuits in 2011.

(Reporting by Karen Freifeld; Editing by Richard Chang)

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