Consumers who have spent money to maintain the protections will get several months of free coverage, but no refunds.
“It’s morbid to think that a consumer will get her money’s worth only if she dies by a certain date,” the Los Angeles Times’ David Lazarus writes, but Chase Bank thinks it’s just fine.
Chase offers credit card insurance of sorts called Payment Protector, Lazarus says. For a monthly fee, less than 1 percent of the card balance, cardholders are protected against job loss, illness and disability. Under the program, payments can be deferred up to two years. In case of death, balances up to $25,000 are forgiven.
That makes 95-year-old Dorothy Cross worth more dead than alive, Lazarus says, and she likes it that way. Cross has a balance of more than $38,000 across three Chase cards, and she’s been paying for the protection for about 10 years. She’s spent more than $16,000 to maintain the protection on her cards.
And now Chase is cutting her — and many others — off.
The bank is ending the program June 1, Lazarus says. The bank is giving customers who already have the service free enrollment until then. But that’s small compensation to people who don’t plan on dying in the next nine months and have already poured thousands into the program instead of paying down their balances.
Chase and other credit card companies, including Bank of America, American Express and Capital One, are eager to get out of payment protection because the Consumer Financial Protection Bureau has been handing out fines for deceptively marketing credit card add-on products, Lazarus says. The contract for Payment Protector says the bank can change the deal at any time.
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