Federal regulators are widening an investigation into whether the nation’s biggest banks used flawed documents and incomplete records to collect on delinquent credit card debts, the Washington Post reported today. The scope of the inquiry is unclear, but those familiar with it say that the Office of the Comptroller of the Currency is expanding a probe that began in 2011 with allegations that JPMorgan Chase was using error-filled documents in lawsuits against debtors. The regulatory agency is examining the process several banks use to verify consumers’ outstanding debt before taking legal action. Regulators began examining the debt collection practices of JPMorgan in 2011 after a former bank employee, Linda Almonte, said nearly 23,000 delinquent accounts were riddled with inaccuracies. Almonte, who sued JPMorgan for wrongful termination, claimed she was fired after warning her supervisors about the records. The Almonte case, which was settled out of court, raised concerns among regulators that the same sorts of haphazard practices that plagued the foreclosure process might have crept into debt collection.
