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Big Banks Face Investigation Into Whether They Helped Debt Collectors Pursue Faulty Judgments

Big Banks Face Investigation Into Whether They Helped Debt Collectors Pursue Faulty Judgments

The largest U.S. banks face a multi-state investigation into whether they helped debt collectors pursue faulty judgments against credit card customers, according to people familiar with the matter.

At issue is whether weak record-keeping by banks or a failure to pass accurate information to collection agencies harmed consumers.

The allegations against the banks echo those central to last year’s $25 billion federal-state mortgage settlement to resolve charges that the banks “robo-signed” documents and pursued foreclosures with faulty information.

This latest probe targets the same banks, including Bank of America, JPMorgan Chase, Citigroup and Wells Fargo, said the sources who spoke on condition of anonymity because the investigations are continuing.

As with the mortgage cases, the investigation focuses on the banks’ poor paperwork and their weak tracking of the debts.

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