Former Chase Exec Makes Debt Sales Allegations in Lawsuit

A former assistant vice president with JP Morgan Chase has filed a lawsuit against her old employer claiming, among other things, that the credit card unit misrepresented information about a portfolio of card debt for sale.

In a suit filed in Bexar County (Texas) District Court, Linda Amonte alleges the bank had about 5,000 accounts with incorrect balances and did not have the court documentation for some 11,000 accounts with judgments that the bank said it had, misrepresenting those accounts to potential debt buyers.

Amonte, team leader in the bank’s credit services division in San Antonio, said she was in charge of auditing the accounts, but couldn’t confirm some of the judgments or balances, causing her to question the values with her immediate superior.

The lawsuit alleges that she went above her supervisor to another level of the bank’s management, and “made it clear she would not participate” further with the attempt to sell the portfolio, which included more than 23,000 delinquent accounts with a value of more than $200 million, according to the lawsuit. Almonte alleges in the lawsuit that she was relieved of her duties in November of last year as a result of her actions.

Debt buyers typically conduct due diligence of their own to confirm the value of a portfolio before completing a deal. But sometimes those values and account ownership are difficult to determine.

Greg Ousley, CEO of Global Debt Registry, said his firm was founded to provide a third party data validation solution, as well as chain of title origination and management, for all of the global banks. This type of solution would prevent issues like the one Almonte alleges.

But debt buyers are typically protected through warranties made on the portfolios when purchased. This allows buyers to put back – or a seller to buy back — certain accounts that are later found to be bankrupt, deceased, or lack information stipulated in the sales contract.

Almonte’s attorney, John Bruster “Bruse” Loyd of Houston, said that all charges in the lawsuit are allegations at this time and that the discovery process will help determine if any of the charges are true.

A Chase spokesman told insideARM the bank doesn’t comment on pending litigation.

No court date has been set on the case. Almonte is requesting a jury trial and seeks unspecified damages.

<<< Return to Newsletter