JPMorgan Chase To Pay $2.5M In Settlement Due To Extra Fees
A legal case between cardholders who claim the bank charged extra fees and higher interest rates has finally come to a close with a $2.5 million settlement
JPMorgan Chase, the US’ largest bank, will be paying $2.5 million to settle a class-action lawsuit regarding extra fees on cryptocurrency purchases. This was a legal case that extended for over two years.
In 2018, Brady Tucker, Ryan Hilton and Stanton Smith, filed the lawsuit against JPMorgan in a Manhattan federal court. The plaintiffs claimed that the bank was charging customers additional fees in the form of cash advances when it came to crypto purchases made with Chase credit cards.
Brady Tucker also claims that he received both extra fees and significantly higher interests rates on the cash advances than on the credit cards. In addition, he was unable to receive his refund of $160 in extra costs when he complained.
The issue started in early 2018, when JPMorgan and several other banks chose to block their customers from buying cryptocurrencies using their credit cards.
JPMorgan did not immediately inform their clients that part of the change in policy was to start treating credit card purchases of digital assets as cash advances. The banking giant only released this update 10 days after the changes were implemented. This was a move the plaintiffs argued was a violation of the cardholders’ terms of services.
In a recent hearing, Chase Bank defended itself by saying that its cardholder agreements did not actually change, and that cryptocurrencies are “basically like cash” since they are also an acceptable medium of exchange. They concluded that this was why they were not required to give advanced notice to their customers.
JPMorgan added that the trio who filed the lawsuit could not claim that the bank violated their customer agreements when it ended the purchase of cryptocurrency with credit cards and began treating them as cash advance activities, which brought about more fees and increased interest rates.
In addition, the bank claimed that Coinbase also renamed its merchant category from “purchases” to “cash advances”, which started the adjusted fee schedule.
The plaintiffs demanded a full refund of all unlawful cash advance charges. They also requested $1 million in statutory damages, as well as an order declaring that the bank’s cardholder terms do not permit the bank to implement such excessive charges when purchasing crypto assets.
While JPMorgan did agree to settle the lawsuit with a $2.5 million payment, they did not admit to any wrongdoing as a part of the settlement deal.