Class Action Claims JPMorgan Chase Bank Mishandled Funds from Unclaimed Cashier’s Checks

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A proposed class action out of New York claims JPMorgan Chase Bank, N.A. retained and used for its own benefit the funds from uncashed cashier’s checks for longer than allowable by law and improperly delivered the money to Ohio rather than the states in which the checks were purchased. The lawsuit alleges that JPMorgan overstepped various state laws and caused the owners of the abandoned property to not be notified of their entitlement to collect the funds.

The case explains that banks are required by the laws of the states in which they do business to deliver abandoned property, such as uncashed cashier’s checks, to the state in which the checks were purchased (known as escheatment). Escheatment laws, the suit says, govern each state’s specific procedures for escheating abandoned property, including the amount of time after which unclaimed property is considered abandoned, the process for notifying owners of such property of the intended transfer, and the reporting of the escheated property to the relevant state. According to the case, JPMorgan ignored various states’ escheatment laws and instead delivered the funds from uncashed cashier’s checks to Ohio, where the bank is headquartered. The suit claims the defendant kept records of the locations where the checks were purchased, the names and addresses of the purchasers, and each check’s serial number, among other information, yet refused to surrender the unclaimed funds to the correct states.

By delivering the funds to Ohio rather than the proper state in which the checks were purchased, JPMorgan gained a “substantial economic benefit,” the lawsuit argues, as the escheatment laws of Ohio are more favorable to the bank than those of other states. While most states allow banks to retain and make use of funds from cashier’s checks for three years before deeming them abandoned and subject to escheatment, Ohio allows banks to retain the funds for five years, the case says. Moreover, the suit explains, Ohio exempts business-to-business transactions from escheatment, which, in effect, allowed JPMorgan to retain the funds from such checks indefinitely. Lastly, Ohio allows banks to deliver only 10 percent of the abandoned funds to the state and retain 90 percent “potentially indefinitely,” the suit says.

The case thusly argues JPMorgan’s conduct was intentional and allowed the bank to retain “tens of millions of dollars” of abandoned property that should have been surrendered to other states. From the complaint:

According to the lawsuit, the defendant’s actions have robbed the owners of abandoned property of their right to be notified of their entitlement to claim the funds. The case points out that many states have laws in place requiring banks to file a report with the state regarding the abandoned property that includes, in most cases, the owner’s name and address, as well as provide the owner direct notice of the intended transfer of the funds to that state. These notification processes allow the owners of abandoned property to be made aware of its existence and claim the funds, the suit alleges. When the funds are delivered only to Ohio, the owners of such funds are most likely never notified and therefore robbed of the value of their property, the case argues.

“Accordingly,” the complaint states, “Plaintiffs and each of the members of the Classes are entitled to recover the funds for the Checks owned by them and either improperly held by JPM or wrongly delivered to the State of Ohio, plus interest for each year JPM did not pay the funds to the Plaintiffs and the members of the Classes, together with the additional relief described [in the complaint].”