Here's some salt for JPMorgan's $920 million wounds.
The Consumer Financial Protection Agency said this afternoon JPM must give back the money to 2.1 million customers. The CFPB and the Office of the Comptroller of the Currency found that these customers were billed for credit monitoring services that they never received.
“At the core of our mission is a duty to identify and root out unfair, deceptive, and abusive practices in financial markets that harm consumers,” said CFPB Director Richard Cordray. “This order takes action against such practices and requires Chase to fully refund more than $300 million to consumers who were charged illegal fees.”
The $309 million fine comes just hours after regulators including the SEC, Federal Reserve, OCC and the UK's FSA fined the bank $920 million over the infamous London Whale trading mess.
The London Whale derivatives trade cost the bank over $6 billion in losses. The bank, including CEO Jamie Dimon, faced much scrutiny from lawmakers and regulators for its failure to catch such a massive bad trade.
The combined incidents today are costing the nation's largest bank $1.2 billion in fines, penalties and refunds.
The credit card refund comes as the result of an investigation where the CFPB found that JPM enrolled consumers in credit card add-on products that alerted customers to fraudulent activity on their accounts. The agency found that JPM charged customers for the service without first getting their authorization.
According to the CFPB, the monthly fees ranged from $7.99 to $11.99 even though the promised services were not performed. In some cases, consumers paid for these services for several years without receiving all of the promised benefits.
In a statement, JPM said, "We stopped new enrollments in these products in mid-2012 and will fully exit them by the end of this year,” said Bill Wallace, head of Operations for Consumer & Community Banking. “We have already credited or refunded the customers affected. Any mistakes like these are regrettable and we are committed to ensuring our partners and vendors hold themselves to the same high standards that our customers expect of us."
For those who are owed a refund from Chase the CFPB says you don't have to do anything to get it. The refund should be automatically credited on your November or December 2012 statement as “ID/FRAUD PROTECT CREDT[Phone Number].”
Says the CFPB, "If you are eligible but no longer had an account with Chase as of October 2012, a check should have been mailed to you by the end of November 2012. If you have questions about whether you are entitled to a refund, please contact Chase."
