More Bad News for JPMorgan: It Owes Credit Card Customers $309 Million

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JPMorgan (JPM) is having a very bad day.

Just hours after it was announced that the bank would be fined $920 million for its "London Whale" trading loss fiasco (not the mere $700 million or $800 million first reported), news came down that it must also pay customers $309 million for bad credit card practices, plus $80 million in fines.

The Consumer Financial Protection Bureau announced today that JPMorgan Chase and Chase Bank have agreed to pay refunds totaling $309 million to more than 2.1 million customers. The joint action with the Office of Comptroller of Currency "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."

Sound familiar? It should. The marketing of credit card add-on products was actually the subject of the CFPB's very first enforcement action, which forced Capital One to reimburse customers $150 million. Clearly, this sort of misbehavior is something the agency takes seriously.

Thursday's order finds that, from October 2005 to June 2012, JPMorgan charged customers between $7.99 and $11.99 a month for identity theft protection and fraud monitoring services. But according to the CFPB, those services were only "partially performed" or not performed at all. Even worse: In some cases those monthly fees caused some customers to exceed their credit limits, which resulted in even more fees.

The good news for Chase is that it knew this was coming: It had already stopped marketing the services on its credit cards as of 2011, and issued refunds last year. (If you're still a Chase customer, you should have received the refund as an account credit, and if you've since left the bank you should have received a check.) This order is more of a formality intended to ensure that Chase fully pays the money it owes customers. And, the CFPB's order also includes a $20 million civil penalty, which is on top of a separate $60 million fine levied by the OCC.

Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.

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7 Comments

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bigthng999

Banks robbing us? Who would have thought?

September 21 2013 at 6:50 PM Report abuse rate up rate down Reply
traveljohnsonj

Even after paying fines and penalties...good ol\' JP Morgan will still have made millions in profit...bottom line, customers get ripped off and the executives make big bonuses and walk free. It is time for bank officials to spend some jail times for their crimes!

September 21 2013 at 12:26 AM Report abuse rate up rate down Reply
Stephen

The banks are out to get every penny they can by hook or crook and they ike the Republican Party do not belive in history they get cought pay a fine and then just change one thing and go back to plaing the same game all over again. Why becuse n the interm the time thy were first cought and had to pay fine that representedmaybe on tenth of the profitthey made on the scamand the secound time they get cought and pay another fine of 10% of what they made on the scam they were abel to use the extra money to pull of some other scams that they have not been cought at yet. So for every million that they have to or is written that they are fined they make 10 million above he fine may have to pay.but is the american Public that ends up having toreinburse them for the fine tht they mayhave paid.

September 20 2013 at 7:00 PM Report abuse rate up rate down Reply
TEMAC97

it seems to me that jpm is part of every scandal taking place in banking, from rigging the electric system, to cornering the metal markets to the london whale, i have read in many colums where people call them crooks and thieves, and never a peep from them , they sure look gulity from the outside---------

September 20 2013 at 2:07 PM Report abuse +2 rate up rate down Reply
findrobin

lol. Thats like saying you and me owe 5 cents for fraud.

September 20 2013 at 11:43 AM Report abuse +1 rate up rate down Reply
Tony Hedberg

Good. Problem is that not only do they have banks of lawyers figuring out how to reduce that amount, they will try and put off paying it for as long as they can. If all else fails, they'll ask for a bail out, and probably get it. Not to mention that they'll write if off as a loss on their taxes and probably get a huge refund, which they'll use to pay off the $309 million they ripped off their customers for (that is, after the lawyers get their cut), and they'll write that off as a loss too.

September 19 2013 at 5:09 PM Report abuse +1 rate up rate down Reply
mbc18650

The CFPB has already called banks on fraud against their own customers, and returned over a Billion Dollars stolen from everyday Americans.

Wouldn't have happened if not for Elizabeth Warren, and Republicans fought tooth and nail to stop, block, and then neuter the agency.

How can anyone be against protecting Americans from fraud by huge banks and companies that know exactly what they are doing.

The executives of these companies really should go to jail, just like pick-pockets, shoplifters, and all others who steal.

September 19 2013 at 4:14 PM Report abuse rate up rate down Reply