Chase online banking service fails for second time this week

JPMorgan Chase & Co., whose website failed Wednesday for the second time this week, will refund late fees and help fix other problems for the 16.6 million online customers unable to access their accounts.

“We will work with customers on any issues that occurred, including late fees,” Tom Kelly, a spokesman for the New York bank, said in a statement. The site went down late Monday and service was restored around 10 p.m. PDT Tuesday. The system failed again several hours later and was back online by Wednesday afternoon.

The problem was a software glitch and customers’ accounts weren’t at risk, said Christine Holevas, a company spokeswoman.

The bank’s primary regulator in Washington was on alert after the service initially failed.

“We monitored this situation very closely,” said Bob Garsson, a spokesman for the Office of the Comptroller of the Currency. He declined to elaborate.

JPMorgan’s active online customers have increased by an average annual rate of 42% since 2006, according to a presentation to investors by Chief Executive Jamie Dimon. More than 3.7 million households use JPMorgan’s website to pay their bills.

“Online customers should contact Chase telephone banking at (800) 935-9935 or visit a branch to correct late fees that were incurred during the outage,” Holevas said. JPMorgan will also refund late fees charged by other institutions, she said.

The length of the outage raises operational risk and internal control issues for the bank, which was the only major Wall Street firm to make it through the financial crisis without posting quarterly losses, said Christopher Whalen, a former analyst for the Federal Reserve Bank of New York and co-founder of Institutional Risk Analytics in Torrance.

“These systems are big and complex, but they should have redundancy to take the ‘A’ system off-line if need be for hours at least,” Whalen said.

Dimon apologized for the inconvenience during his presentation at Barclays Capital on Tuesday, saying, “I know our system is down today. I apologize for that.”