Bank of America Corp (BAC), Wells Fargo & Co (WFC): Robo-Signing, ‘Sewer Service’

Page 1 of 2

Bank of America CorpRobo-signing is in the news again, and in a big way. For one thing, the New York Attorney General’s office is suing Bank of America Corp (NYSE:BAC) and Wells Fargo & Co (NYSE:WFC) for allegedly failing to follow the conditions of the $26 billion settlement over shabby foreclosure practices, which featured the mindless signing of foreclosure documents.

The second thing is just as odious: Banks have apparently been using the same robo-signing techniques in the collection of credit card debt — and further investigation may find other credit card issuers are involved, too.

Robo-signing, “sewer service”
The Attorney General’s office announced late last week that it is bringing charges against JPMorgan Chase & Co. (NYSE:JPM) for using a slew of illegal maneuvers to wring non-existent debt from at least 100,000 credit card users in California. Among the dastardly procedures used by JPMorgan, the AG’s office alleges, are the famous robo-signing of fraudulent documents, while neglecting to notify targeted consumers of the fact that they were being sued — a tactic known as “sewer service.”

Regulators have been eyeballing JPMorgan for some time now, ever since the Office of the Comptroller of the Currency got wind of these shenanigans from former employees. Those involved noted discrepancies such as computer databases showing different card balances than the bank was alleging, and work of dubious quality by the outside attorneys used in the debt collection process.

Last summer, The New York Times published a story about this very issue, noting that Citigroup Inc (NYSE:C), American Express Company (NYSE:AXP) , and Discover Financial Services (NYSE:DFS) were also being scrutinized for similar behavior. The accounts of consumers being sued for amounts that they claim they do not owe are harrowing, particularly since the article notes that, in credit card cases at least, many defendants don’t show up in court — resulting in an automatic win for the credit card issuer. Considering the fact that JPMorgan is accused of being remiss in notification of these suits, it’s no wonder consumers aren’t defending themselves.

A far-reaching problem
Doubtless, this is just the tip of the iceberg, with sanctions against Citi, American Express Company (NYSE:AXP), and Discover sure to follow. Bank of America Corp (NYSE:BAC) is likely to get tagged, as well: American Banker noted early last year that B of A sold credit card debt acquired with its MBNA purchase to a collection agency back in 2009 and 2010, even though there was evidence that the debt had dicey paperwork attached.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!