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September 19, 2013 at 09:43 AM
Just as JPMorgan Chase agreed on Thursday to pay $920 million to settle trading losses related to the London Whale case, the Consumer Financial Protection Bureau ordered Chase Bank USA and JPMorgan Chase Bank to pay a $20 million penalty for charging credit card customers for services they weren’t receiving.
On top of that, the Office of the Comptroller of the Currency ordered both Chase entities to pay a $60 million civil penalty.
The bank refunded about $309 million to customers in late 2012.
CFPB said that the enforcement action was the result of work started by the OCC that the CFPB joined last year. The agencies found that Chase engaged in unfair billing practices for certain credit card add-on products, charging consumers for credit monitoring services that they did not receive.
“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.”
According to the CFPB order, Chase enrolled consumers in programs that promised to monitor customer credit and alert consumers to potentially fraudulent activity. In order for consumers to obtain credit monitoring services, they 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,” according to CFPB.
