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JPMorgan Chase admitted to overcharging more than 4,000 active-duty military personnel on their home loans and said it foreclosed in error on 14 of them. The company will send out $2 million worth of refunds to 4,000 active-duty customers who were affected.
JPMorgan Chase admitted to overcharging more than 4,000 active-duty military personnel on their home loans and said it foreclosed in error on 14 of them. The company will send out $2 million worth of refunds to 4,000 active-duty customers who were affected. Chris Hondros/Getty Images
The banking giant JPMorgan Chase is admitting it made some very big mistakes. As first reported by NBC News, the firm says it overcharged more than 4,000 active-duty military personnel on their home loans and foreclosed in error on 14 of them.
Julia Rowles and her husband, Marine Capt. Jonathan Rowles, have been fighting with Chase ever since Rowles was commissioned as an officer in 2006.
"They would say, 'We will take your house. We will report you to the credit agency. This is a bad situation that you don't want to be getting into. Pay us today.' They were harassing us for money that we did not owe them," Julia Rowles says.
Her husband once got a collection call at 3 a.m. None of that was supposed to happen. Under a federal law called the Servicemembers Civil Relief Act, most troops can get their mortgage interest rates reduced to 6 percent while on active duty, and foreclosures aren't allowed. Rowles says her husband, who is now overseas, was granted the lower interest rate, but Chase didn't adjust its records.
"They kept still charging us 9 and 10 percent, and we were paying upwards to $2,000 when we should have only been paying $1,400," she said.
This week Chase said it would send out $2 million worth of refunds to 4,000 active-duty customers like the Rowles family who were overcharged. It also admitted to wrongfully foreclosing on 14 homes, and said all but one of those cases had been resolved. Bank officials declined an interview request, but in a statement said: "While any customer mistake is regrettable, we feel particularly badly about the mistakes we made here."
But attorney Dick Harpootlian in Columbia, S.C., isn't ready to accept the apology. He's one of the lawyers representing the Rowles family in what he hopes will become a class-action lawsuit against Chase.
"I was a prosecutor for 12 years. Everybody that got caught taking money that wasn't theirs always said they were sorry, offered to give it back and call it even," he said. "And that's just not what ought to happen in cases like this."
Elizabeth Warren, a special assistant to President Obama, says the case illustrates why the U.S. needs a strong consumer financial protection agency. She's putting together the new Consumer Financial Protection Bureau that was created by Congress to look out for consumers in the wake of the financial crisis. The agency will also focus on protecting military families.
"We need a cop on the beat," Warren said. "The laws are in place, but there's no one to enforce them and no one to speak up for these families. This is just wrong."
Warren says the laws exist so service members can concentrate on doing their jobs.
They should not be "worried about paperwork and bills and whether or not a loved one is being harassed for money that's not even owed."
Warren visited Lackland Air Force Base in Texas on Tuesday to talk to military families about their financial concerns. She was joined by Holly Petraeus, the wife of Gen. David Petraeus, the commander of U.S. forces in Afghanistan.
Holly Petraeus was one of the first hires for the new consumer bureau.
"I really can't think of anything better to be doing while my husband is deployed forever than working on a project like this," she said.
She'll head the office of Service Member Affairs, which will be on the lookout for issues like those at Chase.