Chase to Employee: ‘Go Along with the Plan to Sell the Misrepresented Asset’

The American Banker’s Jeff Horwitz recently put together a fantastic story exposing widespread internal irregularities at Chase regarding its credit card practices. The story is pulled from information gathered from a number of current and former Chase employees.

It all began back in 2009 when Chase’s credit card team sold off credit card judgments valued at around $200 million to a debt collector at a discounted price. The debtors in question have already been brought to court in these types of sales, making them extremely attractive to collections agencies. It’s a practice that has become incredibly commonplace in the industry, and it usually results in consumers suffering debt harassment. The bank makes what money it can on the debt, then the collector does the same and consumers end up paying the price.

Getting back to the story, as the Rolling Stone reports, one Linda Almonte arrived at Chase in the summer of 2009 to take over a mid-level executive position in the firm’s credit card division. It wasn’t long before she discovered something was seriously amiss with these judgments. Almonte would later become a whistle-blower who Rolling Stone fears could still land in some hot water for summoning the courage to reveal the truth about what was going on at Chase.

Almonte eventually told her co-workers that half of the files involved in the sale were actually sans proof of judgment. They were also missing other important information. Worse still, approximately one fourth of the files incorrectly stated how much money particular borrowers owed. The actual amounts that were owed turned out to be less than “what Chase was representing,” she would later claim in a suit.

It still gets worse. In some instances the customers were actually owed money by Chase. Just thinking about how many consumers may have been the victims of debt harassment when they were actually the ones owed money is sickening. Furthermore, the collections agency was also ripped off by being bamboozled into purchasing “judgments.”

Almonte brought the errors to the attention of her managers. The reception wasn’t what she was hoping for. She was essentially told to pipe down and sell the stuff anyways if she knew what was good for her. Jason Lazinbat, her boss, supposedly told her “she had better go along with the plan to sell the misrepresented asset.”

Almonte was fired in November of 2009 as a result of her push back. She had great difficulty finding work afterwards and even had problems getting regulatory issues to look into the matter. The Comptroller of the Currency is now supposedly on the case, though.

This despite the errors that amounted to millions of dollars worth of accounts being fraudulently sold and a clear internal desire at Chase to push ahead and avoid the truth getting out: “We did not verify a single one” of the affidavits attesting to the amounts Chase was seeking to collect, says Howard Hardin, who oversaw a team handling tens of thousands of Chase debt files in San Antonio. “We were told [by superiors] ‘We’re in a hurry. Go ahead and sign them.’” Numerous other employees throughout the company would eventually go on to corroborate the reports.

Just as many debtors, and many individuals who aren’t actually even in debt, lived in fear of harassment by collectors, Almonte now fears prosecution by Chase. She accepted a modest pay-out to keep quiet on the matter since she was so hard pressed for cash and was having trouble finding employment. Thanks to her brave actions, though, the public now knows the truth about Chase.