The U.S. Consumer Financial Protection Bureau said on Wednesday it had ordered JPMorgan Chase & Co (NYSE: JPM) to pay $4.6 million for allegedly failing to make sure it reported accurate information for checking account screening reports.
The bank failed to provide accurate screening reports to screening companies such as Certegy Check Service, ChexSystems, and Early Warning Services which help verify if a person is eligible to open an account, according to Reuters. Chase did not have proper procedures to ensure information it gave the companies was true, according to the CFPB.
According to the statement, Chase kept customers in the dark about the results of their screening. This could have led to people with cleans pasts to be turned down or even people with a history is misconduct to be able eligible to open an account.
“Information about checking account behavior is used to determine who can open a bank account,” said CFPB Director Richard Cordray. “Because Chase did not have the required processes to report this information accurately, and kept consumers in the dark about reporting disputes and application denials, the Consumer Bureau is imposing a $4.6 million penalty and other measures to stop these violations in the future.”
The Bureau said that Chase violated laws stated in the Fair Credit Reporting Act, breaking violations such as:
- Failed to have adequate processes for accurately reporting checking account information
- Kept consumers in the dark about the results of their disputes
- Kept consumers in the dark about key aspects of their checking account application denials
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Bureau has the authority to take action against unfair practices such as Chase was committing.
As part of the consent order signed by CFPB Director Richard Cordray, the bank agreed to create reasonable procedures for checking accuracy, to tell consumers results of dispute investigations, and to give consumers denied accounts contact details of the company that provided their screening report.
The bank has neither denied nor admitted to such practices.