As a sort of interesting addendum to the recent debt validation post, it seems JP Morgan/Chase has stopped taking people to court for delinquent credit card debt.
A recent article at American Banker reported that, very quietly, Chase has stopped filing new cases and even laid-off some of its lawyers in Illinois. As the chart to the left indicates, the drop has been fairly pronounced. They collected $405 million in the first quarter of 2011, $321 million in the second quarter, and only $266 million in the third quarter.
Chase is not revealing anything so there is a lot of conjecture in the blogosphere. There is at least some indication that it could be due to poor documentation; somewhat akin to the “robo-signing” scandal for home foreclosures.
And no one knows if this is permanent because Chase has found another way to recoup these monies or if it’s only a temporary slowdown as they investigate and refine their documentation procedures.
A tip of the hat to Credit Slips for pointing to the American Banker article.
