Jump To Navigation
Contract disputes could boil over if Chase allows data breaches

JP Morgan Chase just got one more problem to contend with. It seems that it has been contracting with states to send taxpayers' refunds, unemployment checks and other payments to recipients in the form of Chase debit cards. California does not seem to be one of those states. The setup supposedly allowed the governments to save money in postage, paper and mailing costs. In one state, however, contract disputes are brewing because computer hackers got into Chase's bank computers and stole the personal information on some 14,000 accounts.

This leaves those victims open to identity theft. It also leaves Chase open to numerous claims coming from several different directions. The governments can sue Chase for breach of contract, for the amount of any damages incurred after the dust fully settles on this fiasco. Chase also could be liable on negligence claims from the 14,000 people so far who've been exposed to serious trouble.

Those people are from Connecticut but there may be other states and other files compromised. One state official pointed out that Chase let it go until the last minute to advise Connecticut that there was a problem. This allowed Chase to remain the contract-holder because it was too late for Connecticut to change providers for the upcoming tax season.

A spokesman for Chase downplayed the events by saying this was only a minute percentage of all of those who received debit cards. That answer may have been of little consolation to the 14,000 individuals whose information was compromised. He said that those affected would receive two free years of credit monitoring. Given Chase's track record, that might be an offer that few are willing to accept.

The Chase spokesman said that the bank continues to monitor the accounts and has no reason to believe that the accounts were used wrongfully. Again, that was possibly of little comfort to those worrying about their information circulating in the world at large. Contract disputes in California generally follow the same legal analyses as in all other states, although at last report it is believed that Chase has not contracted with any California institutions.

Source: Hartford Courant, McKinney Seeks Paper Tax Refunds After Data Breach, Christopher Keating, Dec. 6, 2013

No Comments

Leave a comment
Comment Information

Contact Our Firm

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Follow Us On:

Office Location

Jerry L. Freedman,
A Professional Corporation
3625 E. Thousand Oaks Blvd., Suite 292
Westlake Village, CA 91362
Phone: 805-409-9056
Toll Free: 800-430-0837
Fax: 805.230.9173

Map and Directions