Chase has been getting a lot of (well deserved) bad press lately, so much so that I can’t keep track. Here is a quick primer.
It’s been accused by the Office of the Comptroller of the Currency, a group of 13 states, and now Massachusetts is investigating it for its debt collection practices (WSJ: Massachusetts Propse J.P. Morgan’s Debt-Collection Practices, 9/22/13).
The OCC said the bank and its outside lawyers allegedly filed inaccurate documents in court, didn’t properly notarize documents and made statements about the accuracy of documents that hadn’t been verified. The regulator ordered the bank to notify consumers in the future when their debt was being sold to a third party, to properly maintain account documents and to ensure employees and other staff involved in litigation had required information.
In May of this year California also accused Chase of bad debt collection practices.
California filed a lawsuit in May accusing J.P. Morgan of “fraudulent” and “unlawful” methods in its pursuit of old debts from 100,000 borrowers in the state. The bank hasn’t commented on that suit, which is pending.
Among the practices in question is pursuing people for debts after they filed for bankruptcy (and presumably lying to them that they were still responsible for the debt when actually they were not).
Chase also agreed this week to pay an $80 million fine over allegations related to products sold to credit-card holders (WSJ: J.P. Morgan Settles Consumer Cases, 9/19/13).
Then lets not forget the London Whale fiasco (Wikipedia), a failed effort to pursue huge profits through proprietary trading (trading for their own, not customers, good). Given how much Chase seems to be into lines of business that line their own pockets, one has to wonder if they even come close to honoring the fiduciary responsibility they have to their customers. Regulators have since lambasted Chase’s senior management (WSJ: SEC Calls Out JP Morgan Management More than 100 Times, 9/19/13) for a lack of internal controls (they did whatever they wanted). Jamie Dimon seems to have basically lied when he initially announced the London Whale losses, claiming they were only $2 billion. In the end they were over $6 billion.
Back in July it became apparent that JP Morgan Chase was one of the bank responsible for hoarding commodities to drive up prices (JPMorgan to quit physical commodity trade amid scrutiny 7/26/13).
Most recently the group’s investment in warehousing firm Henry Bath has been attacked by metals consumers for distorting markets and driving up prices. The Department of Justice and the U.S. Commodity Futures Trading Commission have also both launched probes into metal warehousing.
If that isn’t enough, they are also accused of manipulating the power market (Enron anyone?) and have a greed to pay a $410 million fine (JPMorgan Accused of Energy-Market Manipulation by U.S. Agency, 7/29/13).
The FERC staff said in today’s allegations, announced by e-mail, that the bank’s energy-trading unit was involved in five market-gaming strategies in California from September 2010 to June 2011. The company engaged in three gaming strategies in the Midwest from October 2010 to May 2011, the staff said.
Wonder why your electric bill is so high? Among other things, blame Chase.
Still think your money is safe with Chase? Think again. They don’t care about little banking customers, they are all about the big profits for themselves.