JPMorgan Shuts Down Student Aid Startup Frank, Citing User Base Dominated by Fake Accounts

A little under two years ago, JPMorgan Chase, the largest financial institution in the nation, was eager to unleash the potential of its latest acquisition known as Frank. The hot new financial planning platform, billed as “Amazon for higher education,” was geared toward matching college-age users with student aid opportunities around the country. Boasting a user base in excess of five million, Frank’s $175 million purchase was intended to boost JPMorgan’s capabilities of helping the younger generation access funds for their schooling.

Unfortunately for its new owner, Frank has turned out to be less sound of an investment than previously thought, and JPMorgan has filed legal action against the company after shuttering Frank’s website. According to the lawsuit, Frank Founder Charlie Javice vastly oversold the company’s reach, and their much-touted millions of users likely only number 300,000 or fewer.

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“To cash in, Javice decided to lie, including lying about Frank’s success, Frank’s size, and the depth of Frank’s market penetration in order to induce JPMC to purchase Frank for $175 million,” said JPMorgan’s lawyers. “Javice represented in documents placed in the acquisition data room, in pitch materials, and through verbal presentations [that] more than 4.25 million students had created Frank accounts.”