🎧 Listen: In today's episode of The Journal podcast, melissakorn recounts the story of what went wrong after JPMorgan Chase paid $175 million to acquire Frank, a college financial planning startup that claimed it had millions of users
This transcript was prepared by a transcription service. This version may not be in its final form and may be updated.
Charlie Javice: Hi, I'm Charlie Javice. I'm the founder of PoverUp and currently a sophomore here at Penn.Charlie Javice: We're lucky to be here with PoverUp and really looking at redefining the way of doing good and redefining the way of giving by lending someone a hand, not just giving money. Kate Linebaugh: Frank was sort of like TurboTax for financial aid. It would help students fill out the main financial aid form, the free application for federal student aid or FAFSA. Here's Javice in a 2019 interview on CBS.
Kate Linebaugh: And Javice got a lot of buzz for Frank. She made the Forbes 30 under 30 list in 2019. When did it catch the attention of JPMorgan? Melissa Korn: They were really quite shocked. And it was a bit of an embarrassment, and they were confused. Right? Because they thought they bought this company with four million people, and all of a sudden, it doesn't seem like they're real.Melissa Korn: They started to investigate. They opened an internal investigation into Charlie and Frank more broadly. It lasts quite a while.
Melissa Korn: On Charlie's side, she says that it's not uncommon to use synthetic data, which is what was built up in this list of four million plus people. So using numbers in place of actual real figures. And that that's common practice in a lot of areas. JPMorgan did not see it that way. They saw it that Charlie had fleeced them.
Melissa Korn: I spent many hours getting a better sense of what Frank was, what they promised to offer, what they actually offered. There were reviews on Frank's website years ago, in its early days, raving about the service and thanking Frank for all the great work they had done for these supposed customers.
Melissa Korn: Diamond said that deals are done by individual businesses within JPMorgan. This was done by the consumer bank, and they would be held accountable.
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