Cross Posted at Legal Schnauzer
The largest bank in the United States has become involved in the debt-collection business, and many consumers probably are not aware of it.
We are talking about JPMorgan Chase, which has an estimated $2 trillion in assets, making it the largest private corporation in the world. Why did Chase feel the need to get involved with the ugly world of debt collection? I'm not sure, but the subject hits close to home.
I have written extensively about the experience my wife and I have had with debt collectors who routinely violate the Fair Debt Collection Practices Act (FDCPA), the law that is supposed to govern their actions. I also have shown that the FDCPA is notoriously weak, and that has allowed debt collection to become perhaps the darkest corner of the financial-services sector.
A reader informed me recently that JPMorgan Chase has quietly become a major player among debt collectors--and, in fact, has played a central role in my own story.
How did that happen? Well, it started on November 15, 2006, when a company called One Equity Partners closed on its acquisition of NCO Group. One Equity Partners, it turns out, is a wholly owned subsidiary of JPMorgan Chase; in fact, it is the company's private investment arm.
What is NCO? Based in Horsham, Pennsylvania, it is one of the largest, and least reputable, debt collectors in the country. It has played a front-and-center role in our own debt-collection story. Here is how I explained it in an earlier post:
In our case, the original creditor allegedly was American Express, the debt collector or buyer (I'm not sure which) was NCO Financial Services, and the phone calls came mostly from Ingram & Associates, a Birmingham law firm.
NCO is well known for flagrant violations of the FDCPA. Public records indicate that Ingram and Associates' principal Angie Ingram is part of something called the "NCO Attorney Network"--even though her surrogates repeatedly told us Ms. Ingram "worked for American Express," "had been hired by American Express to sue you," "had a fiduciary relationship with American Express," etc.
The Ingram and Associates folks, after receiving the account from NCO, threw all kinds of insults, threats, and falsehoods at us. They threatened and insulted my wife, even though the alleged debt was in my name only and did not involve her. That in itself is a major violation of the FDCPA. But it certainly did not stop there. Here is a sampling of misconduct from NCO/Ingram:
First of all, neither NCO nor Ingram ever sent us anything in writing, informing us of our rights to dispute the debt or have it validated, as required by the FDCPA. They simply started calling us and alleging that we owed a debt.
Did they ever offer any written proof that we owed the debt? Nope. But they were happy to say they could sue us and that we could wind up having the deed to our house auctioned off "on the courthouse steps."
Could Ingram carry out this threat? Well, they didn't. Seeing as how they never offered a shred of proof that I owed the debt, it's hard to see how they could have. And seeing as how the debt was in my name only, but our house is jointly owned by my wife and me, it's hard to see how they could sell the deed to our house on the courthouse steps.
But the fine folks at Ingram & Associates, apparently with the blessing of NCO and American Express, wanted us to believe we could wind up homeless because of an alleged credit-card debt that they had not proved we owed.
Then I learned from a reader that JPMorgan Chase was involved in this scam all along. Jamie Dimon, the company's CEO, has become the face of banking arrogance in recent months. Dimon's reputation might sink even lower when the general public becomes aware that his firm has dipped a massive toe in the debt-collection swamp.
How has this affected my wife and me? Let's consider a timeline: One Equity Partners, Chase's investment arm, buys NCO in November 2006; we start hearing from both NCO and its surrogate, Ingram and Associates, in spring 2007. JPMorgan Chase owned NCO for several months before the company ever contacted us. That means Chase was driving the sleazy collection train in our case the whole time.
In legal terms, NCO had an agency relationship with Chase, and Ingram and Associates had an agency relationship with both NCO and Chase. That means Chase is vicariously liable for the violations of federal law in our case. If you've been unlawfully targeted by NCO in roughly the past five years, Chase probably is vicariously liable in your case, too.
What do we mean by vicarious liability? It's a legal doctrine that arises in many lawsuits and is explained here.
NCO never has been a noble outfit; you can Google "NCO and fraud" and pull up volumes of articles about various scams involving NCO and debt collection. But it's possible that the company has become even worse since falling under the JPMorgan Chase umbrella in late 2006.
After all, consider what we've learned about Chase earlier this summer: It made a monstrously bad trade that resulted in a loss that first was estimated at $2 billion and now has risen to $5.8 billion--the total loss might wind up being $7.5 billion. Chase also has been linked to the LIBOR rate-fixing scandal that, so far, has focused largely on the British bank Barclays.
For posterity's sake, I tape recorded several conversations in which Ingram representatives made multiple statements that grossly violated the FDCPA. We soon will be sharing those tapes with our readers. It will give you cringe-inducing insight into the way large debt collectors try to frighten consumers into paying debts they might not even owe. And you can almost bet, in many cases, the collectors cannot prove a particular consumer owes a specific debt.
That's because record-keeping in the debt-collection field is worse than sloppy; it's almost nonexistent. But that doesn't stop collectors from trying to con consumers into paying money they might not legally owe.
That's what happened in our case. And we now know that various entities were operating on behalf of JPMorgan Chase all along.