Chase fined $136 million for illegal debt collection practices

Illinois will receive $7.2 million as part of a $136 million nationwide settlement with JPMorgan Chase over what federal and state regulators said were illegal tactics to go after struggling credit card borrowers.

The federal Consumer Financial Protection Bureau alleges that the bank illegally relied on robo-signing — signing large numbers of documents — and sold "false debts to third-party collectors, including accounts with unlawfully obtained judgments, inaccurate balances and paid-off balances." The bureau also said Chase filed "misleading debt-collection lawsuits against consumers using robo-signed and illegally sworn statements to obtain false or inaccurate judgments for unverified debts."

Under the agreement announced Wednesday, JPMorgan Chase will pay more than $95 million to 47 states and the District of Columbia, an additional $11 million to states that conducted the investigation and settlement negotiations, and $30 million to the Consumer Financial Protection Bureau.

A Chase spokesman said, "We are pleased to resolve these legacy issues and are working to complete our remediation of affected credit card customers.''

Illinois' share will go to the Illinois Equal Justice Foundation to fund legal aid services, including consumer debt counseling for poor and elderly residents, according to a statement from Illinois Attorney General Lisa Madigan.

Chase also paid $50 million in consumer restitution through a separate 2013 consent order reached with the U.S. Office of the Comptroller of the Currency. About 6,000 Illinois consumers were due to get an estimated $7.5 million in restitution, Madigan said.

As part of the new agreement, Chase was ordered to stop attempts to collect, enforce in court or sell 528,000 consumers' accounts. Madigan said that included 48,000 Illinois consumers.

Chase must pay a separate $30 million penalty to the U.S. Office of the Comptroller of the Currency.