Welcome to DU! The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards. Join the community: Create a free account Support DU (and get rid of ads!): Become a Star Member All Forums Issue Forums Culture Forums Alliance Forums Region Forums Support Forums Help & Search
 

Demeter

(85,373 posts)
49. How a Whistleblower Halted JPMorgan Chase's Card Collections
Sat Mar 17, 2012, 06:47 AM
Mar 2012
http://www.americanbanker.com/issues/177_52/jpmorgan-chase-credit-card-collections-1047573-1.html

No sooner did Linda Almonte show up for work on November 30, 2009 than was she escorted out the door by security at JPMorgan Chase's Credit Card Litigation Support Group in San Antonio. A midlevel Chase executive who oversaw business process execution employees, Almonte says she was fired after just six months on the job for challenging her superiors about the accuracy of the bank's credit card records. Colleagues first learned of her dismissal later in the day when operations manager Jason Lazinbat, Almonte's former boss, gathered bank staff in a conference room and announced she was no longer with the bank. Under no circumstances, Lazinbat warned, were staffers to communicate with Almonte, recalls Carole McGinn, a quality control worker who spent 14 years at Chase. The account was confirmed by second employee, who requested to speak anonymously.

"It was an unusual statement," McGinn says. "Other people had left the bank, and we were not told" to cut off contact with them.

The contentious nature of Almonte's departure was a prelude to a series of events that serve as a cautionary tale for the banking industry. The former mid-level staffer eventually filed a whistleblower suit and complaints with regulators that accused Chase of a range of lapses over three years. They include: failure to reconcile the inconsistent past-due balances generated by the bank's computer systems; pressure from management to collect delinquent debts even in the absence of complete or accurate records; and robosigning of affidavits that brings into question the legal integrity of Chase's claims against tens of thousands of consumers. Many of Almonte's accusations are backed by internal bank documents and current and former employees. What's more, they've forced Chase to cease operations in a collections unit that had previously generated billions of dollars in annual revenues.

...Almonte charged in her wrongful termination suit that Chase fired her for resisting its efforts to sell faulty credit card debts. Chase, in its defense of the suit, made no effort to contest Almonte's allegations about the inaccuracy of its records or to proffer alternative explanations for her firing. Instead, it argued that it could release employees at will under Texas law and was within its rights to sell credit card accounts whose documentation was problematic or missing, as long as it informed buyers...Almonte proved persistent, however. She contacted a number of regulators, including the Securities and Exchange Commission and Federal Trade Commission, expanding on allegations from her wrongful termination suit. She also discussed her complaints with officials from the Office of the Comptroller of the Currency, which oversees nationally chartered banks, including Chase. The OCC dispatched enforcement staffers to the bank's San Antonio facility for two months late last year as part of a still ongoing investigation, as American Banker previously reported....A now defunct website, Legalmorass.com, took up Almonte's cause. The Wall Street Journal and the New York Times also mentioned her suit in stories on bank documentation problems. Her attorney, Bruse Loyd of Jones, Gillaspia & Loyd, L.L.P, successfully opposed Chase's attempts to get her case dismissed in court. By then Almonte says she was nearly broke and living with her family in a motel as a result of her inability to find another job in banking. Almonte settled her suit with Chase last April on undisclosed terms and agreed to stop talking about her case.

But Almonte's efforts appear to have prompted the bank to order its in-house collections lawyers to undertake top-to-bottom reviews of "reconciliation," the process by which the bank was supposed to ensure that its legal filings matched the its internal records. That's according to a former Chase attorney who spoke on condition of anonymity. The bank had never undertaken such reviews before. When pressed by lawyers in the field for an explanation, senior officials at Chase's New York headquarters stated that the OCC was making inquiries about Almonte's allegations, according to the former Chase attorney. The reviews concluded that Chase's in-house legal work was solid, this person adds. Former members of the bank's litigation support staff agree. However, they add that the serious problems existed elsewhere. Namely, in the bank's back-offices and with outside collections firms, which had limited access to Chase's internal records and financial incentives to recoup as much as possible from consumers. Instead of focusing solely on those areas, Chase around the middle of last year fired Gail Siegel, who had formerly run its internal collections litigation teams, bank sources say. Then, around the time it settled with Almonte, Chase ordered its in-house and contract law firms to drop outstanding card-related litigation altogether.

Virtually overnight, Chase mothballed a legal operation that had been producing several billion of dollars in legal judgments a year and more than $1.2 billion in recoveries. Over the next few months, Chase also fired the lead attorneys in most of its satellite offices.

MORE CORPORATE THRASHING--SEE LINK

JPMorgan Chase's annual report, filed with the SEC last month, made no reference to its 11-month litigation hiatus or any impact on earnings.
Here is one of her "dating" songs Demeter Mar 2012 #1
Wow..thank you for introducing me to her. dixiegrrrrl Mar 2012 #77
LEAP/E2020: The five devastating storms in summer 2012 at the heart of the world geopolitical swing Ghost Dog Mar 2012 #2
There's a hopeful note way at the bottom - bread_and_roses Mar 2012 #72
BRICS is Brazil, Russia, India, China--Developing nations, they call them Demeter Mar 2012 #82
What were they thinking in Dearborn, MI? hamerfan Mar 2012 #3
Back at ya Po_d Mainiac Mar 2012 #16
That be so. Ghost Dog Mar 2012 #24
Concerns rise over eurozone fiscal treaty Demeter Mar 2012 #4
When Irish Eyes Are Hopeful Ghost Dog Mar 2012 #10
Standard Chartered banker detained in China Demeter Mar 2012 #5
Friday evening ZeroHedge snapshot: "Where "The Money" really is..." Ghost Dog Mar 2012 #6
Re. "You are here" (for the sake of your eyeballs/ Ghost Dog Mar 2012 #12
Nearly 8 PM EDT AND NO BANK FAILURES YET Demeter Mar 2012 #7
Lyrics - WHAT WAS I THINKING? DemReadingDU Mar 2012 #8
More signs of a bumpy Chinese landing girl gone mad Mar 2012 #9
The Chinese are accustomed to rough landings Po_d Mainiac Mar 2012 #17
China will ensure tankers can haul Iran oil I BET THEY WILL; THANK YOU, CHINA! Demeter Mar 2012 #56
Iran’s Crude Oil Exports to Fall 50% on Embargo, IEA Says Demeter Mar 2012 #57
THE US IS STILL OPERATING UNDER THE DELUSION THAT IT CAN CREATE ITS OWN REALITY Demeter Mar 2012 #58
Iran Deleted From the World's Banking Computers Demeter Mar 2012 #59
Will SWIFT ban on Iran strangle Spain? Demeter Mar 2012 #60
A Tale of Two Tales What Real World? By Fred Reed Demeter Mar 2012 #62
Oh, Fred, I like to read him DemReadingDU Mar 2012 #63
Can't argue with him at all. dixiegrrrrl Mar 2012 #79
And the trade medium will not be the U$D Po_d Mainiac Mar 2012 #70
The PIIGS Strike Back Demeter Mar 2012 #11
Thanks for the clip. I have never heard an intelligent banker yet. mbperrin Mar 2012 #35
Ann Arbor's own Tansy_Gold Mar 2012 #13
White House Pours One Out for All the Dead Journos, Waterboards the Living girl gone mad Mar 2012 #14
. ((broadcast TV news—i.e. nice haircuts talking to the elderly)) . Ghost Dog Mar 2012 #15
Do as we say, not as we do Po_d Mainiac Mar 2012 #19
Source (link) please? Ghost Dog Mar 2012 #25
Officer Pike comes to Maine Po_d Mainiac Mar 2012 #30
Too cool. Ghost Dog Mar 2012 #34
and sad Po_d Mainiac Mar 2012 #39
That's real. Ghost Dog Mar 2012 #40
Scahill was on Democracy Now! yesterday. Fuddnik Mar 2012 #20
I have NEVER had such a case of "Voter's Remorse" as I have these days Demeter Mar 2012 #23
There are no options in that system bread_and_roses Mar 2012 #54
Illinois' lost decade CHI-TRIB EDITORIAL Demeter Mar 2012 #18
My native state. How sad. How tragic. n/t Tansy_Gold Mar 2012 #71
Italy Said to Pay Morgan Stanley $3.4 Billion Demeter Mar 2012 #21
One Half of Italy's New Sales Tax Receipts Go Directly to Morgan Stanley in New York girl gone mad Mar 2012 #27
Currency Wars: Are American Derivatives Dealers Leaving Europe? Demeter Mar 2012 #33
You're busted, Demeter. So busy posting, you take too little time to read the SMW, even. Ghost Dog Mar 2012 #32
Busy? You Said It Demeter Mar 2012 #36
The Kingdom of Heaven is Within You. Ghost Dog Mar 2012 #38
It's more like this Demeter Mar 2012 #41
I'm sorry. Ghost Dog Mar 2012 #43
Christine shares a secret crush with the Kid (and her mother) Demeter Mar 2012 #22
This Is Your Defense of Goldman Sachs and Wall Street? Demeter Mar 2012 #26
Comment from DWBartoo Demeter Mar 2012 #28
And one from workingclass Demeter Mar 2012 #29
And a third from textynn Demeter Mar 2012 #31
Carry on, Weekenders Demeter Mar 2012 #37
Why Larry Summers lost the presidency of Harvard / Cathy O'Neil, mathbabe Demeter Mar 2012 #42
Ghost Dog is the only one that can clean up Wall Street Po_d Mainiac Mar 2012 #44
That would be entirely too easy Demeter Mar 2012 #46
Damn. Now I'm busted. Ghost Dog Mar 2012 #47
CORPORATE "FREEDOM OF sPEECH" Demeter Mar 2012 #45
Bill Black: (Re) Occupy Greece Demeter Mar 2012 #48
How a Whistleblower Halted JPMorgan Chase's Card Collections Demeter Mar 2012 #49
OCC Probing JPMorgan Chase Credit Card Collections Demeter Mar 2012 #51
J.P. Morgan Chase's Ugly Family Secrets Revealed By Matt Taibbi Demeter Mar 2012 #61
g'morning -- great thread xchrom Mar 2012 #50
Dehydration or Sleep Apnea are two good ways Demeter Mar 2012 #52
I think it's the weather - it's off and on - rain & sun. xchrom Mar 2012 #53
Whistleblowers Reaping Rewards in U.S. Mortgage Suits Demeter Mar 2012 #55
Well, the Kid wants to go out in the delicious Spring Air Demeter Mar 2012 #64
Beware, son II Facebooked that he was attacked by huge misquitos yesterday. kickysnana Mar 2012 #66
Yeah, the bugs are out Demeter Mar 2012 #67
Everyone have a safe and sane St. Paddy's Day. Fuddnik Mar 2012 #65
Corporate Malfeasance – And Why It Corrupts By John Perkins Demeter Mar 2012 #68
Federal jobless aid ending for 80,000 S.C. residents Demeter Mar 2012 #69
Foreign millionaires fled Zurich after tax change xchrom Mar 2012 #73
awesome grilled steak dinner w/ friends last night....followed by ... morning? xchrom Mar 2012 #74
Sunday morning, pouring buckets of (muchly needed) rain Tansy_Gold Mar 2012 #75
that all sounds very, very good! xchrom Mar 2012 #76
Goldman Sachs Board Must Act on Smith Op-Ed, Ex-Partner Writes xchrom Mar 2012 #78
Betcha a weekend they don't Demeter Mar 2012 #81
Ladies and gentlemen of the thread, I am wiped Demeter Mar 2012 #80
Snow on the mountain and wise words Tansy_Gold Mar 2012 #83
For those with Link TV, Fuddnik Mar 2012 #84
Latest Discussions»Issue Forums»Economy»Weekend Economists Ask: &...»Reply #49