Last year, my colleague Tara Siegel Bernard and I wrote a series of articles about banks closing the checking accounts of dozens of ordinary citizens and small businesses. Often there was no clear reason, explanation or recourse.
JPMorgan Chase seemed to have done a lot of this in recent years. Customers would get a call from the bank or their ATM cards would stop working and then their credit cards would also freeze.
One question that lingered was what the long-term ramifications would be for those whose accounts were closed. Fortunately, people who had experienced this were usually not blacklisted from opening accounts at other banks, even if their previous bank told them it would never accept them again.
But what if you tried work In a bank that had kicked you out?
And so we come to the strange case of Mansoor Shams, a Navy veteran who lives in Baltimore and used to run a business exporting consumer electronics, including Apple products.
As part of this business, Mr. Shams used a Chase business credit card that earned him United Airlines frequent flyer miles. He believes he invested more than a million dollars in it, including for trips abroad to places where he sold his inventory, such as Kuwait and Saudi Arabia.
In 2014, Chase canceled that card, even though Shams paid his bills on time, he said. What he remembers is that the bank didn’t say much beyond boilerplate language about periodic reviews of customers’ accounts. He was upset, but he turned the cards and moved on.
Last year, Mr. Shams received a job offer for a marketing position at the bank. He was supposed to earn a six-figure minimum salary once he passed the background check. But he failed, and the cancellation of the 2014 card was the reason given.
There is so much chaos in this matter that it is difficult to know where to start. But let’s start here: In 2022, a year before Chase revoked the offer for the marketing position, the bank had no problem hiring Shams for a wealth management position where he would help manage other people’s money.
He left that position several months later after failing two licensing exams. That, however, was not an obstacle to getting the job offer in marketing a year later. But then a background check that revealed the cancellation of the card disqualified him.
Shams was bewildered and furious. “He hadn’t killed anyone in the previous months, so what the hell?” he said. No one he encountered during the hiring process would say much more, either. He even tried Jamie Dimon, the CEO.
After the job offer was revoked, Shams sought an explanation for the 2014 cancellation of the bank’s credit card unit and received a letter, riddled with grammatical errors, that was a copy of the letter the bank had given him. sent in 2014. It included the following: “Closing the account is not a step Chase takes lightly. We have an obligation to periodically review relationships with our clients and assess risk.”
So what happened here? In addition to the merchant account, Chase closed one of Mr. Shams’s personal credit cards around the same time.
“We closed the credit card accounts in 2014 because the purchases made on them did not match what Mr. Shams told us about his business,” said Chase spokesman Jerry Dubrowski.
And what had Mr. Shams told the bank? The bank did not want to say; Dubrowski said federal laws related to banking security prevented Chase from releasing this information.
Mr Shams said he had told the bank the truth about his business and that the nature of it had not changed after he started using the card. Furthermore, the bank never contacted him to express his concerns.
Meanwhile, the bank says it did not properly vet Shams in 2022, when he briefly worked in wealth management. If he had, according to the bank, he would not have been hired at that time either.
And a computer generated that letter? Dubrowski said it was written by a person.
Banks are under no obligation to hire anyone, nor do they have to explain when they don’t hire someone or rescind an offer. No one has the right to have a bank account and financial institutions grant credit at their discretion.
Additionally, shareholders and regulators expect banks to be conservative in their risk management, both in terms of who they do business with and who they employ. Something about Mr. Shams’ spending made Chase distrustful, although he has not and is not accusing him of doing anything illegal.
However, few people want to live in a world where we are all at the mercy of financial services companies and their algorithms. While humans also played a role here, the bank’s comment still leaves Shams more frustrated than before.
“They put a red mark on the rest of my life,” he said. “If it is a risk issue, close the account and do not put any mark in my name. But if I’m not a criminal, why put my name in your system a flag that affects my career 10 years later?