The CFPB thanked regulators on Thursday for taking enforcement action against JPMorgan Chase and Chase Bank, which were found to have engaged in unfair billing practices for credit monitoring products.
“This is the third action that we have taken with our fellow regulators to address problems in the credit card add-on product market,” CFPB Director Richard Cordray said. “We are continuing that work, and we continue to be vigilant in pursuit of those who deceive consumers or treat them unfairly. Consumers deserve better, and we intend to help them achieve that.”
Between 2005 and June 2012, Chase allegedly offered credit card customers the option to purchase add-ons that would monitor their credit and alert them to potentially fraudulent changes. Consumers, by law, must authorize access to credit in writing, but Chase was found to have charged consumers for the products before receiving written authorization from customers.
After the fees charged for the products exceeded some customers’ credit limits, consumers were charged additional fees and interest on the transactions.
Under the settlement with regulators, Chase is required to entirely repay consumers who were charged for the service. Chase has already paid over $300 million to more than two million customers.
Regulators also fined Chase $20 million in civil penalties—a reduced amount for their cooperation and remediation efforts. The bank has vowed to improve its third-party oversight and has submitted to an independent audit.