Chase to Pay $389M to Settle Credit Card Fees Allegations

Chase to Pay $389M to Settle Credit Card Fees Allegations

 WASHINGTON, D.C. — (Mealey’s) JPMorgan Chase & Co. (Chase) on Sept. 19 agreed to pay $80 million in fines to settle allegations by the Consumer Financial Protection Bureau (CFPB) and Office of the Comptroller of the Currency (OCC) that it charged customers additional fees for credit card services they did not receive, bringing to $389 million the amount it will pay in refunds and penalties related to the allegations (In the Matter of:  JPMorgan Chase Bank N.A. and Chase Bank USA N.A., No. 2013-CFPB-0007, In the Matter of:  JPMorgan Chase Bank N.A., Columbus, Ohio and Chase Bank USA N.A., Wilmington, Delaware, OCC No. 2013-141).

CFPB Consent Order

In a consent order, the CFPB found that Chase violated Sections 1031 and 1036 of the Consumer Financial Protection Act “in connection with its billing and administration of Identity Protection to Customers,” which the CFPB  said occurred between October 2005 and June 2012.

“The Bank’s compliance monitoring, service provider management and quality assurance failed to prevent, identify, or correct the billing for services that were not provided,” the CFPB said.  The CFPB said that Chase’s “acceptance of monthly payments while failing to provide credit monitoring services has resulted in substantial injury to more than 2.1 million customers in the amount of at least $270 million on fees and over-limit charges, as well as more than $39 million in associated interest fees.”

The CFPB directed Chase to pay a civil penalty of $20 million, “make full redress . . . to all Eligible Customers” and “cease and desist and . . .  take reasonable measures to ensure that its Vendors and other agents cease and desist from engaging in violations of law or regulations in the billing and administration of Identity Protection Products[.]”

OCC Consent Order

The OCC, in a consent order, said that it has identified “deficiencies in the Bank’s practices” that resulted in a violation of Section 5 of the Federal Trade Commission Act relating to the same practices described in the CFPB consent order.  The OCC said the violation “is part of a pattern of misconduct that resulted in financial gain to the Bank.”

The OCC said Chase has agreed to pay a $60 million civil penalty.

Chase has already paid the $309 million in refunds, the CFPB and OCC said.

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