Chase Bank Forgives "All Outstanding Credit Card Debt" For Canadian Customers

submitted by magnora7 from (zerohedge.com)

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[–]Optimus85 3 insightful - 2 fun3 insightful - 1 fun4 insightful - 2 fun -  (5 children)

Here's the alleged reason: “Chase made the decision to exit the Canadian credit card market,” the company said in a statement. “As part of that exit, all credit accounts were closed on or before March 2018. A further business decision has been made to forgive all outstanding balances in order to complete the exit.”

So what would convince a mega bank to walk away from what could be millions of dollars? The company tells CBC it was the best decision for the bank and customers, hinting that forgiveness was probably cheaper than continuing to process payments or farm it out to a third party debt collector.

https://fortune.com/2019/08/08/chase-forgives-outstanding-credit-card-debt-canada/

[–]magnora7[S] 3 insightful - 1 fun3 insightful - 0 fun4 insightful - 1 fun -  (4 children)

Thanks for digging that up.

hinting that forgiveness was probably cheaper than continuing to process payments or farm it out to a third party debt collector.

I find it very hard to believe giving up all the debt was cheaper than selling it to a 3rd party... unless the debt was so incredibly insolvent that the assumption is it will mostly never be paid off...

[–]Vigte 3 insightful - 1 fun3 insightful - 0 fun4 insightful - 1 fun -  (0 children)

unless the debt was so incredibly insolvent that the assumption is it will mostly never be paid off...

Welcome to Canada...

[–]Optimus85 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (2 children)

Sometimes it costs them more money trying to recover those debts than the debt itself. Is it the best decision a financial institution can make? Who knows... Remember the sub-prime mortgage crisis and the government bailouts using taxpayer money?

[–]magnora7[S] 3 insightful - 1 fun3 insightful - 0 fun4 insightful - 1 fun -  (1 child)

Remember the sub-prime mortgage crisis and the government bailouts using taxpayer money?

Yeah I do, but then I remember the government bailing them out then the banks learning nothing and continuing the same behavior.

The loan forgiveness never happened in the US. But here it seems they've preemptively discharged loans they don't think they can make money on. This is... new

[–]Optimus85 3 insightful - 1 fun3 insightful - 0 fun4 insightful - 1 fun -  (0 children)

Yeah, it's kind of surreal.