JPMorgan Chase accused of refusing to refund customers and failing to terminate fraudster's accounts amid federal investigation: report

A federal investigation into banking giant JPMorgan Chase is targeting how the bank handles and protects potential fraud victims, according to a new report.

The Consumer Financial Protection Bureau (CFPB) is investigating whether the bank is properly refunding customers and effectively eliminating fraudsters' bank accounts, CNBC reports, citing sources who requested anonymity and spoke of an ongoing investigation.

The agency's concerns center on the way the bank handles customers who transfer money through Zelle. Investigators are also reportedly looking into similar concerns regarding Wells Fargo and Bank of America.

In a recent filing, Chase confirmed an investigation was underway and said it was “exploring next steps, including litigation.”

The bank declined to publicly comment on the CFPB's investigation.

The Senate Permanent Subcommittee on Investigations recently found that Chase, Wells Fargo and BofA reimbursed victims who reported fraud on Zelle 38% of the time in 2023, down from 62% in 2019.

The subcommittee also says the three banks collectively refused to refund $880 million in disputed Zelle transactions between 2021 and 2023.

The Electronic Fund Transfer Act specifically protects people who lose money through unauthorized transfers, but does not provide the same protection when customers are tricked into approving illegal transactions.

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