JPMorgan Refunds $389 Million to Customers for Ill-Suited Credit Card PracticesBy: Meaghan Ellis - September 20, 2013
JPMorgan Chase & Co. have had coarse week that has cost them well over $1 billion in fines and refunds. Only hours following the announcement of admission in the London Whale trade devastation, which cost the bank $920 million in fines, JPMorgan made yet another announcement. The bank informed the public that they’d executed a massive reimbursement of over $309 million to credit card customers as well.
As the United States’ largest banking empire, JPMorgan’s two largest financial subsidiaries – Chase Bank, USA and JPMorgan Chase Bank – the bank serves as a major contributor to the financial sector in regards to both business and consumer relations. According to Fox Business, The massive refund was disbursed to approximately $2.1 million customers as a result of “illegal credit card practice,” said the Consumer Financial Protection Bureau.
The ill-suited credit card practices against consumers also came with another fine of $60 million in addition to the $309 million, which bumped the cost up to $389 million.
The Consumer Financial Protection Bureau also stated: “The agencies found that Chase engaged in unfair billing practices for certain credit card ‘add-on products’ by charging consumers for credit monitoring services that they did not receive,” the CFPB said, they also alleged the bank, “charged customers as soon as they enrolled in these products even if they were not actually receiving the services yet.”
The ill-suited practices took place over a span of 6 ½ years, from October 2005 until June of 2012, ranging from approximately $7.99 to $11.99 in monthly fees. These fees were assessed for services that were not provided. For example, any consumer who paid the additional monthly fee with the intent on receiving credit protection or other perks that supposedly came with the card as an additional feature actually didn’t receive anything.
JPMorgan Chase’s Head of Operations for Consumers and Community Banking issued a statement on behalf of the bank as well:
“We stopped new enrollments in these products in mid-2012 and will fully exit them by the end of this year. 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.”
The latest announcement provided a combined total for JPMorgan’s regulatory fines in addition to customer refunds bringing the total to a staggering $1.289 billion.
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