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JP Morgan Drops Pursuit of Many Delinquent Credit Card Accounts
JP Morgan Chase (NYSE:JPM) has abandoned over a thousand credit-card debt-collection lawsuits across the US The country's second largest bank by assets, including over $100 billion in credit-card accounts, wouldn't disclose the number of cases dismissed or the reasons for doing so. The bank has dropped its lawsuits targeting borrowers in California, Florida, Illinois, New Jersey and New York since April, state judges said. The bank was owed $45.9 billion in outstanding credit card debt in those 5 states as of March 31, including both current and delinquent accounts. Thomas Donnelly, an Illinois state-court judge in Chicago, said JP Morgan has withdrawn the cases without prejudice, meaning they can re-file them later. Roughly 94% of these types of collection cases result in default judgments in favor of the lender, according to industry estimates. The article speculates that the suits were dropped because of irregularities in paperwork used to verify the validity of the credit-card debt being pursued. Judges have complained that JP Morgan and other banks have gone to court with sloppy or even fraudulent documentation of debts. Last year, a Richmond County, NY judge dismissed 150 credit card collection suits filed by JP Morgan because the paperwork appeared to be signed in large numbers by only a few individuals. JPMorgan Chase has a potential upside of 37.1% based on a current price of $40.07 and an average consensus analyst price target of $54.92.