This story appeared in Bank Digest.
The Consumer Financial Protection Bureau 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. As a result of these billing tactics, consumers: were charged for services they did not receive, incurred charges for interest and fees, and failed to receive product benefits.
"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."