The agency has taken similar action against credit card companies.
In the case of Chase, the CFPB said the credit giant enrolled customers into credit monitoring programs between October 2005 and June of last year, often without the necessary written authorization. Monthly fees ranged from about $8 to $12.
If that’s not bad enough, the CFPB also said these charges sometimes caused customers to exceed their credit limits, causing them to be dinged by other fees and interest.
It gets worse. Consumers thought their accounts were being monitored for fraud, but Chase either didn’t perform the service at all or only partly did so, the CFPB said.
More than 2.1 million customers were affected.
Chase has been ordered to return $309 million to them, plus any interest or fees they paid because of this practice. The CFPB said most consumers have already received their refunds.
The company must also pay $20 million to the CFPB’s civil penalty fund and another $60 million in civil penalties to the Office of the Comptroller of the Currency.
Left messages with Chase for comment, and will post it when it comes in.
During the financial crisis, JPMorgan Chase was held out as one of the better players. This is another hit to its reputation. Yesterday, too, the bank agreed to pay $920 million to settle a derivatives trading scandal.
UPDATE Chase sent along this statement:
“We stopped new enrollments in these products in mid-2012 and will fully exit them by the end of this year,” said Bill Wallace, head of Operations for Consumer & Community Banking. “We have already credited or refunded the customers affected. Any mistakes like these are regrettable and we are committed to ensuring our partners and vendors hold themselves to the same high standards that our customers expect of us.”