JP Morgan Fined $2 Million For Credit Protection Product
June 21, 2011
JP Morgan Chase (NYSE:JPM) has been fined $2 million by the Office of the Comptroller of the Currency (OCC) in regards to the marketing of "credit protection products" sold through the bank's auto, home lending and card services divisions between January 2008 and May 2009.The bank consented to the fines, but did not admit or deny the accusations, according to the OCC statement.According to the compliant, the bank used "high-pressure sales tactics and made materially false, deceptive or otherwise misleading oral statements" about the cost and coverage of a "credit protection program" that offered to suspend or cancel all or part of an account balance if a "qualifying event" occurred.The complaint added that sales people used scripts and employed rebuttals for customers that declined credit protection. The OCC said the rebuttals were misleading "because they could lead a reasonable consumer to misapprehend what was being offered and could affect a reasonable consumer's decision to purchase."JPMorgan Chase has a potential upside of 37.3% based on a current price of $40.5 and an average consensus analyst price target of $55.6.