JPMorgan Chase agreed to settle regulators' civil claims that it used high-pressure tactics with auto loan customers.  The bank will pay a $2 million fines to the Comptroller of the Currency, and will reimburse customers $25mn.   According to the OCC settlement document, the bank’s customer-service reps deceived borrowers about costs and terms of credit protection offered to cover missed payments in 2008 and 2009.  The OCC added:

Chase advertised the car-loan product, known as the Chase Payment Assurance plan, as a way to cancel some or all monthly payments in case of accidental death, disability, involuntary unemployment or a leave of absence.  However, “Chase Auto used written scripts together with oral high- pressure sales tactics that included statements which were materially false, deceptive or otherwise misleading in violation of the Federal Trade Commission Act.”

In addition to the monetary outlays, JPMorgan agreed to fix deficiencies in credit protection linked to Chase auto, home and credit-card loans, including revising sales scripts and marketing materials for our payment protection products.  The firm also has implemented enhanced and more extensive controls to ensure that its personnel are treating our customers fairly.

CEO Jamie Dimon reassigned retail bank CEO Charles Scharf’s duties and removed Scharf from the firm’s 15-person operating committee in a shakeup of top management yesterday. Scharf’s responsibilities for overseeing auto and student lending were given to card services CEO Gordon Smith.   [Bloomberg, 6/15/11]