JPMorgan Chase & Co. is fed up with payday lenders and other billers who it says seek inappropriate payments from consumers bank accounts with Chase. In fact, so fed up that the bank is taking steps to try to protect its customers from these payment demands.
Ryan McInerney, CEO of consumer banking at Chase, explained in a statement that the bank looked at its policies and decided to make a number of changes.
"Some customers agree to allow payday lenders or other billers to draw funds directly from their accounts, but may not know some of the aggressive practices that can follow. Those practices include repeated attempts for payment that can result in multiple returned items. We don’t believe these practices are appropriate, and are making these changes to help protect customers from unfair and aggressive collections practices," McInerney said.
The first change is that Chase will charge customers only one returned item fee if a biller presents items that have been returned due to insufficient funds in the customer's account more than once in a 30-day period, even if the biller tries multiple times to collect.
"This change is intended to address payday lenders and others who present repeated payments to customers that are not in the spirit of their signed agreement with the customer," Chase said in a statement.
This change is scheduled to take effective by the end of May.
Chase also will make it easier for customers to close an account even if there are open pending charges, including payday lender charges.
"If we believe those pending charges are inappropriate, we won't honor them," the bank said.
Chase also said it is working proactively to identify potential misuse of the automated clearing house, or ACH, system by payday lenders or other companies and to report such practices to the National Automated Clearing House Association, or NACHA. Chase plans to work with NACHA to try to strengthen its policies to disallow excessive payment demands as well.
The bank also intends to implement enhanced communication and additional training with respect to an existing policy to always follow a customer's instructions to stop a payment, the bank said.
Do you use payday lenders? Will Chase's new policy help to protect consumers?
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