WASHINGTON Just hours after agreeing to pay $910 million in regulatory fines related to the London Whale trading scandal, JPMorgan Chase agreed Thursday to repay $309 million in restitution to customers harmed by its credit card practices as well as face an additional $80 million more in civil money penalties.
The Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency jointly issued orders against JPMorgan for unfair billing practices in using identity theft products, largely as add-on products for credit cards. The actions include a $60 million civil money penalty from the OCC and a $20 million payment to the CFPBs Civil Penalty Fund.
They also included restitution to affected customers, which regulators estimated at $309 million paid to roughly 2.1 million customers. All told, JPMorgan agreed Thursday to pay regulators $1 billion in fines, not including the more than $300 million in restitution.
This action is the result of work that the Office of the Comptroller of the Currency began, and which we at the Consumer Bureau later joined, said CFPB Director Richard Cordray in a statement. The agencies found that Chase Bank USA and JPMorgan Chase Bank engaged in unfair billing practices for certain credit monitoring products, which were often offered as add-ons to credit card accounts. Put simply, Chase was charging consumers for services that they did not receive.
The cease and desist order requires JPMorgan to correct the banks compliance with federal laws, governance and risk management of consumer products and any partnering vendors on such products as well as its consumer compliance and internal audit program.
In a statement, the bank said it has already repaid many affected customers and has stopped offering such products.
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 and 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.