Chase Credit Card Customers 'Duped' by Fees for Crypto Purchases, Suit Says
According to the complaint, Chase credit card customers began having their cryptocurrency purchases treated as cash advances beginning in late January.
April 11, 2018 at 04:22 PM
3 minute read
Chase Bank credit card holders have unfairly been hit with high interest rates and fees on cryptocurrency purchases out of nowhere beginning in January, a class action suit filed in Manhattan federal court alleges.
Previously, purchases by Chase cardholders on the cryptocurrency exchange websites were treated as simple purchases. But then, according to the suit filed on behalf of Idaho resident Brady Tucker, one day in January “Chase decided to do something very different.” Tucker's Jan. 27 purchase of $588 worth of cryptocurrency from the site was treated as a cash advance and hit immediately with a 26 percent interest rate, according to the complaint.
Tucker says he ended up paying $143.30 in cash advance fees and nearly $21 in interest charges on five purchases from Coinbase.com between Jan. 27 and the end of his billing cycle on Feb. 20.
Cardholders purchase cryptocurrencies with credit cards to be able to avoid the delay that occurs using a bank account, the complaint notes. Tucker and others in the potential class believed they could pay off these purchases before they incurred finance charges.
“But Plaintiff and the Class were duped. Chase silently smacked them with instant cash advance fees, plus much higher interest rates than normal, and left them without any recourse,” the complaint states.
Other credit card companies started treating cryptocurrency purchases in a similar way at around the same time, according to the complaint. Customers who called their banks to complain about the lack of prior notice got the fees removed, but not with Chase.
The complaint points out that the CEO of Chase's parent company, JPMorgan Chase, has had little nice to say about cryptocurrencies in the past. In September, Jamie Dimon called the cryptocurrency bitcoin “a fraud,” and said he would fire an employee “in a second” if he found out he or she had purchased “stupid” bitcoins.
“It appears that in addition to firing its 'stupid' employees, Chase elected to start
fining its 'stupid' customers: unilaterally,” the complaint states.
Finkelstein & Krinsk associate David Harris Jr., Tucker's counsel, said in an email that, in addition to being unlawful, the bank's move “was also just fundamentally unfair to Chase's customers.
“If banks can change crypto purchases into cash advances without notice, what's to stop them from doing that with other types of credit card purchases in the future,” he asked.
A request for comment from a Chase representative did not get a response.
The complaint alleges the bank violated the Truth in Lending Act. Plaintiffs are seeking to recoup the charges associated with the cash advance, as well as statutory damages of $1 million.
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