Chase acknowledges widespread bank errors
| Friday, Jan 15 2010 05:00 PM
Last Updated Friday, Jan 15 2010 05:00 PM
Talk about a rude awakening. Bakersfield resident Jason Rhodes went online early Friday to check his account balance with JP Morgan Chase Bank and was shocked to learn he was $410 in the hole.
Rhodes said he called the bank's customer service line and was told there had been a mix-up. His $300 ATM withdrawal on Tuesday, as well as a $32.47 grocery store debit charge later that day, had accidentally been processed twice. Not to worry: he was immediately credited for the amounts, and the bank reversed three $33 overdraft fees it had charged him.
"They told me thousands and thousands of customers have been affected and (the bank's) phone lines are jammed," said Rhodes, who became a Chase customer when in late 2008 the bank acquired the assets of his old bank, Washington Mutual.
Indeed, he was not alone. On Friday, Chase acknowledged double-posting ATM and debit transactions -- withdrawals and deposits alike -- of customers in California and Nevada late Tuesday and all day Wednesday.
Bank representatives would not say how many customers were affected. But they emphasized that, on Friday, Chase rectified the accounts of everyone who was double-charged or double-credited -- even though the repair process itself caused a new set of errors when manual fixes were done ahead of a systemwide correction. They said that resulted in extra credits -- including some $132 over-credited to Rhodes -- that had to be readjusted.
Chase spokesmen said the bank has 14 million customers in California and 700,000 in Nevada.
The spokesmen said Chase saw no need to notify customers or regulators of the mistake. They said they did not know how often such errors take place.
Federal rules contained in the Electronic Funds Transfer Act do not require banks to reach out and tell customers when such errors occur.
Chase spokesman Gary Kishner said the bank would have notified customers if the mistake had extended over a longer period.
"But this is something that we were able to resolve right away, so I don't know if it warranted a notice to customers," he said.
A spokesman for the federal Office of the Controller of the Currency, which regulates Chase, said Friday that he was unsure whether banks are required to let regulators know when such mistakes are made.
In addition to reversing its own mistaken overdraft fees, Kishner said, Chase will work with customers to resolve any third-party overdraft penalties associated with the situation.
