JPMorgan Chase Shells Out $27 Million to Settle OCC Claims
JPMorgan Chase & Co. agreed to pay $25 million to customers allegedly misled about credit-protection products ― for auto, credit card, and mortgage ― and $2 million to the Office of the Comptroller of the Currency, which investigated the matter.
The OCC claimed the bank violated the Federal Trade Commission Act in marketing its Chase Payment Assurance product. Specifically, the OCC complaint centered on certain credit protection products ― debt-cancellation contracts and debt-suspension agreements ― sold by Chase Auto Finance, Chase Card Services, and Chase Home Lending. The auto products, sold from January 2008 through May 2009, allowed customers to cancel or suspend payments on their auto loans in events like death or unemployment.
According to the OCC’s complaint, Chase Auto’s customer service representatives used “certain high-pressure sales tactics and made materially false, deceptive or otherwise misleading oral statements relating to the cost and coverage terms of the CPA product.”
The bank stopped marketing the CPA product in 2009.
JPMorgan Chase neither admitted nor denied wrongdoing in the case. It has since revised sales scripts and marketing materials for its payment protection products. Also, Chief Executive Jamie Dimon tapped card services CEO Gordon Smith to oversee auto and student lending, a responsibility formerly held by Charles Scharf, CEO of Chase’s Retail Financial Services unit.
Click here for the OCC Consent Order.
