JPMorgan Chase bank has agreed to pay a $2 million fine to settle claims that it used false statements and high-pressure sales tactics in some of its auto loan products. The company has also previously paid out about $25 million to reimburse customers who bought the loans.
Fines levied by the OCC
The $2 million fine against JPMorgan Chase was levied on Wednesday after a probe conducted by the Office of the Comptroller of the Currency (OCC), the Treasury Department agency that oversees national banks. In addition to its auto loan sale methods, JPMorgan Chase was also compelled to review its sales practices for mortgages and credit cards. The OCC claims to have found other questionable practices there as well.
Auto loans sold between 2008 and 2009
The OCC’s case involves allegations that from January of 2008 until May of 2009, JPMorgan sold auto loan products that would allow customers to cancel or suspend payments in the case of certain unfortunate unforeseeable events, such as the loss of a job or untimely death. Borrowers were charged a monthly fee for the contract.
Sales script provided by the bank
The sales staff of the bank allegedly made false statements when selling the products, often working from a script provided by JPMorgan Chase. The script included rebuttals to objections that potential buyers might raise.
JPMorgan does not admit or deny wrongdoing
The bank stopped marketing the products in 2009. As part of the settlement agreement, JP Morgan Chase will neither admit or deny any wrongdoing. JPMorgan Chase said in a statement that the company is pleased to to settle the matter. It has reimbursed the purchasers of the product and revised its sales practices.
Second largest bank in the U.S.
The banking giant became the nation’s second largest in September of 2008 when the Federal Deposit Insurance Corp. seized Washington Mutual (WaMu) and sold its banking assets to JPMorgan Chase.