It seems that lending and credit giant JPMorgan just cannot catch a break when it comes to federal scrutiny of its business practices. Last week, the lender was served with separate notices from regulators that its business practices in regards to credit cards and the need to pony up refunds as a result of its actions harmed millions of consumers.
At the heart of the issue is how the lender pursued the collection of debt from consumers who had defaulted on their credit cards. Regulators stated that there were “numerous” instances of improper debt collection practices and lack of proper correlation between debt collection and actual debts tied to some of the accounts in question. There was no public word from regulators as to how many accounts these activities affected.
Separately, JPMorgan was ordered to reimburse nearly two million customers for charges that were inexplicably added to their accounts without their consent. Credit monitoring services of a questionable nature were found to have been billed to these individuals, the vast majority of whom had never requested that the charges be added. The total amount ruled by the Consumer Financial Protection Bureau (who initially discovered the issue) and regulators totals $309 million.
JPMorgan issued a statement in an attempt to clarify the matter, and expressed reassurance to its consumers that the charges in question affected only one percent of its customers. It also stated that the charges in question occurred between 2011 and mid-2012, with no further charges accumulated or new accounts billed after that time.
The company had been expecting action from regulators and the CFPB for some time and investigations were still in progress to ensure no other violations had occurred. The investigation was initiated after thirteen states filed charges in federal court in order to see if there had been any wrongdoing. The CFPB was created in 2010 under the Dodd-Frank Act to monitor consumer spending and credit card companies for fraud, waste or other improper business practices.