JPMorgan Chase & Co. has entered a deal valued at $27 million to resolve accusations filed in the U.S. that the auto lending unit of its bank sold products by using high-pressure sales strategies and false statements.
But in agreeing to this settlement, the bank isn’t admitting or denying any wrongdoing. In a statement, the Comptroller's office said that a $2 million fine will be paid to the bank by the Office of the Comptroller of the Currency.
A total of $25 million will be distributed to customers who were misled. During a period that started January 2008 and ended May 2009, JPMorgan Chase sold products that would permit a customer to cancel or suspend payments on their auto loan in the presence of certain triggers like being unemployed or death.
Borrowers will make monthly payments for these products. The OCC asserted that to sell these products, JPMorgan Chase's sales staff lied and gave misleading statements.
The bank gave them a script to work off on. The marketing of these products stopped in 2009. The OCC, which is a division under the U.S. Treasury, said that because of its investigation, JPMorgan Chase was prompted to review sales practices for home lending and credit card services.
JPMorgan then corrected more of its practices in this segment. JPMorgan released a statement to express its pleasure at having resolved the issue. It said that the affected customers have been reimbursed and it has amended its practices.