• 29
  • June
    2011

When a customer owes a business money, the business has a legal right to that money. For many Georgia businesses struggling in a difficult economy, getting the money that is owed is a matter of survival for the business. Because of this, commercial collections have become a vital part of many businesses.

Businesses have multiple legal options available to them for collecting debts. One of the most effective options is filing a collections lawsuit. It is estimated that as many as 94 percent of collections lawsuits result in a judgment for the lender.

Recently, JPMorgan Chase did something unusual in its collection strategy. Chase is the second largest bank in the U.S. by assets, and it has more than $100 billion in credit card accounts. This month, the bank decided to voluntarily drop more than a thousand collection lawsuits it had filed against credit card borrowers who had stopped making payments. According to sources close to some of the cases, the average amount in question in the lawsuits is about $1,000. The lawsuits were filed against credit card borrowers in five large states, where customers owe Chase about $46 billion.

Mysteriously, Chase would not disclose the exact amount of cases it dismissed, the amount of money in question, or the reasons for the decision to drop the lawsuits. Chase characterizes their decision as 'proprietary,' which means 'a secret' in ordinary terms. One judge stated that Chase's attorneys asked to withdraw all of its cases without offering a reason. The judge granted Chase's request and dismissed the cases without prejudice, which means that Chase can refile the lawsuits later.

Source: Collectionscreditrisk.com, "JPMorgan Chase Drops Pursuit Of Collection Lawsuits," 6/24/2011