Chase Ordered to Refund $309 Million to Credit Card Customers

By on

Yet another bank has been ordered to repay customers because of the way it pushed credit card add-on services — in this case identity theft products.

Last year, Discover was forced to refund $200 million to consumers and pay a $14 million fine. Capital One was fined $25 million and told to refund $140 million to customers. Now, it’s Chase’s turn.

The Consumer Financial Protection Bureau says JPMorgan Chase and Chase Bank “unfairly billed customers for services relating to identity theft protection products – including Chase Fraud Detector, Chase Identity Protection (ChIPs), and Chase Identity Protection (IPS) – in a way that violated federal law.”

Customers were charged fees ranging from $7.99 to $11.99 per month for such services without providing Chase authorization to enroll them, and in many cases they weren’t receiving all of the monitoring and protection services they were paying for, the agency says.

Some customers paid for years — as far back as 2005 — without a clue, the Los Angeles Times says.

The bank was ordered to refund $309 million to more than 2.1 million customers, the CFPB says. Chase has already done so: Consumers should have received refunds as an account credit or a check by December of last year.

It’s a good thing, too, because the bank now owes regulators a lot more money. On top of the refunds, Chase owes a $20 million penalty to the CFPB’s Civil Penalty Fund and $60 million in penalties to the U.S. Office of the Comptroller of the Currency, the CFPB says.

Meanwhile, in other Chase news, McClatchy reported:

Also Thursday, British and American regulators announced that JPMorgan Chase & Co. had admitted wrongdoing and agreed to pay nearly $1 billion in penalties for unsafe derivatives trading practices that resulted in $6 billion in losses for the bank in 2012, a debacle nicknamed “The London Whale.”

In another enforcement action Thursday, the company received a cease-and-desist order from the U.S. Office of the Comptroller of the Currency for using improper procedures to collect debt from customers of its credit card, auto-lending and student-lending services, as well as from military service members.

Overall, it’s been a pretty rough week for the company. But if it could afford to pay CEO Jamie Dimon $11.5 million last year, it should be able to cope, right?

Sign up for our free newsletter

Like this article? Sign up for our newsletter and we'll send you a regular digest of our newest stories, full of money saving tips and advice, free! We'll also email you a PDF of Stacy Johnson's "205 Ways to Save Money" as soon as you've subscribed. It's full of great tips that'll help you save a ton of extra cash. It doesn't cost a dime, so why wait? Click here to sign up now.

Check out our hottest deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,272 more deals!

Comments & discussion

We welcome your opinions, but let’s keep it civil. Like many businesses, we reserve the right to refuse service to anyone. In our case, that means those who communicate by name-calling, racism, using words designed to hurt others or generally acting like an uninformed bully. Also, comments that include links to email addresses or commercial websites typically aren't posted. This isn't a place to advertise your business.

  • Cheryl Kohan

    So how does a person know if they are supposed to receive a portion of the penalties?

  • Melissa Kelly

    This says: “Chase has already done so: Consumers should have received refunds as an account credit or a check by December of last year.” As in, 2012??? So why is this news in September 2013?