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CFPB Orders Chase and JPMorgan Chase to Pay $309 Million Refund for Illegal Credit Card Practices
Monday, September 23, 2013 6:50 AM

The Consumer Financial Protection Bureau (CFPB) ordered Chase Bank USA, N.A. and JPMorgan Chase Bank, N.A. to refund an estimated $309 million to more than 2.1 million customers for illegal credit card practices. This enforcement action is the result of work started by the Office of the Comptroller of the Currency (OCC), which the CFPB joined last year. 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.

According to the CFPB order, Chase enrolled consumers in credit card “add-on” products that promised to monitor customer credit and alert consumers to potentially fraudulent activity. In order for consumers to obtain credit monitoring services, consumers generally must provide written authorization. Chase, however, charged many consumers for these products without or before having the written authorization necessary to perform the monitoring services. Chase charged customers as soon as they enrolled in these products even if they were not actually receiving the services yet.

The agencies found that Chase engaged in these practices between October 2005, when Chase first offered the products, and June 2012, when Chase stopped billing consumers who were not receiving the promised benefits.

As a result of the unfair billing tactics, consumers:

  • Were charged for services they did not receive
  • Unfairly incurred charges for interest and fees
  • Failed to receive product benefits

To ensure that Chase honors its obligation to repay all affected consumers and that consumers are no longer subject to these unfair billing practices, the CFPB’s order requires that Chase Bank USA, N.A. and JPMorgan Chase Bank, N.A.:

  • End unfair billing practices
  • Complete repayment, plus interest, to more than two million consumers
  • Conveniently repay consumers
  • Submit to an independent audit
  • Improve oversight of third-party vendors

The Bureau is releasing a Consumer Advisory to make Chase customers aware of this action. The advisory is available at: http://www.consumerfinance.gov/blog/explainer-how-does-the-chase-order-handle-refunds/

The full text of the CFPB’s Consent Order is available at: http://www.consumerfinance.gov/f/201309_cfpb_jpmc_consent-order.pdf