Last year, my colleague Tara Siegel Bernard and I wrote an article. Series of articles Banks closed the checking accounts of ordinary citizens and small businesses. Often there was no clear reason, explanation, or remedy.
JPMorgan Chase seems to have done this a lot in recent years. Customers would get calls from the bank, or their ATM cards would stop working and then their credit cards would be frozen as well.
One question that came to mind was what the long-term consequences would be for those whose accounts were closed. Thankfully, those who had experienced this were not usually blacklisted from opening accounts in other banks, even if their old bank told them it would never take them back.
But what if you tried? Work Are you at the bank that kicked you out?
And thus we come to the curious case of Mansoor Shams, a retired Marine who lives in Baltimore and ran a business exporting consumer electronics, including Apple products.
As part of this business, Mr. Shams used a Chase business credit card that earned United Airlines frequent flyer miles. He believes he spent more than $1 million on it, including foreign trips to places where he sold his inventory, such as Kuwait and Saudi Arabia.
Chase canceled that card in 2014, he said, even though Mr. Shams had paid his bills on time. He remembers the bank saying nothing except general language about periodically reviewing customer accounts. It was annoying, but he replaced the card and moved on.
Last year, Mr. Shams was offered a marketing job at the bank. He was supposed to get a low six-figure salary after passing a background check. But he failed, and was told the reason for the card being cancelled in 2014.
There’s so much mess in this case that it’s hard to know where to begin. But let’s start here: In 2022, a year before Chase rescinded his offer for the marketing job, the bank had no problem hiring Mr. Shams for a role in wealth management where he would help run other people’s money.
He left that position several months later because he couldn't pass two licensing exams. However, that didn't stop him from getting a marketing job a year later. But then, a background check revealed a revoked card and he was disqualified.
Mr. Shams was shocked — and angry. “I haven’t killed anyone in the last months, so what?” he said. No one who met him during the hiring process could say more. He even approached Jamie Dimon, the chief executive.
After the job offer was rescinded, Mr. Shams asked the bank's credit card unit for an explanation for the 2014 job cancellation and received a letter, which contained grammatical errors, that was a copy of a letter the bank had sent him in 2014. It included the following: “Closing an account is not a step Chase takes lightly. We have an obligation to periodically review our customer relationships and assess the risk.”
So what happened here? In addition to the business account, Chase also closed Mr. Shames' personal credit card at the same time.
“We closed the credit card accounts in 2014 because the purchases made with them were not consistent with what Mr. Shames told us about his business,” Chase spokesman Jerry Dabrowski said.
And what did Mr. Shames tell the bank? The bank said nothing – Mr. Dabrowski said federal laws related to bank security prevent Chase from releasing that information.
Mr Shams said he had told the bank the truth about his business, and there was no change in its nature even after he started using the card. Moreover, the bank never contacted him to express its concern.
Meanwhile, the bank says it failed to properly vet Mr Shams in 2022, when he briefly worked in wealth management. According to the bank, if this had been done, he still would not have been hired.
And was that letter generated by a computer? Mr. Dabrowski said a person wrote it.
Banks have no obligation to hire anyone, nor do they have to give an explanation for not hiring someone or rescinding an offer. No one has a right to have a bank account, and financial institutions grant loans at their discretion.
In addition, shareholders and regulators expect banks to be conservative in their risk management — in who they do business with and who they hire. There was something about Mr. Shames's spending that alarmed Chase, even though it has not and is not accusing him of doing anything illegal.
However, very few people want to live in a world where we all do the bidding of financial services companies and their algorithms. Though humans also play a role here, the bank's comments have left Mr Shams more disappointed than ever.
“They have put a red mark on the rest of my life,” he said. “If it was a case of risk, close the account and don't put any flag on my name. But if I am not a criminal, why put a flag on my name in their system, which affects my career after 10 years?”