July 17, 2009
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News: Chase Forgives 13,000 Credit Cardholders
A Florida attorney has been banned from practicing law in the state after reaching an agreement with Florida's Attorney General, Bill McCollum. As a result of the agreement, JPMorgan Chase will receive and estimated $4.4 million in damages. Chase, the world's largest credit card company, will in turn absolve the debts of nearly 13,000 credit card customer accounts. Attorney Laura Hess of Pompano Beach, Florida, and 20 additional businesses collectively known as the Hess Kennedy entities are in receivership after the McCollum filed suit against them. The charges alleged that the Hess Kennedy entities solicited and contracted the thousands of credit card customers under false pretenses. The Hess Kennedy entities mislead the customers by claiming they would negotiate their debt with creditors for pennies on the dollar.
Mr. McCollum entered into the agreement with the Hess Kennedy entities' court appointed receiver, Daniel J. Stermer, which awards the credit card company and its two subsidiaries Washington Mutual and Providian the damages stemming from the Hess Kennedy fraudulent activities. The Hess Kennedy entities allegedly promised clients that they would accuse the credit card companies of violating the Fair Credit Billing Act and they should stop paying against the debt. Under the terms of the agreement, the Hess Kennedy entities are banned from doing any debt negotiation, debt management, or debt training business in the state of Florida. In addition to the $4.4 million settlement, the Hess Kennedy entities will pay 33% of the proceeds of pending litigation.
Last October, Capital One had also settled in a similar suit against Hess Kennedy and received over $1.8 million in restitution. After their settlement, Capital One forgave the debt of over 18,000 credit card accounts. Chase will be notifying the affected customers of the settlement by mail. The charges and settlement are an interesting twist to Hess Kennedy's claim on their internet site that the company "believes that integrity, honesty, and values play a major role in the culture of the company." You might say, the lack thereof, played a major role in this company's demise.