JPMorgan has agreed to pay $100 million to dispose of a suit filed alleging that Chase Bank jacked up the minimum payments due on credit cards, improperly.
The $100 million settlement is 45 percent of the $220 million in alleged up-front transactional fees that consumers paid for the promotional balance transfer loans. The suit alleges Chase Bank wanted consumers to move their balances over to consolidate their debt into loans with “fixed” interest rates until balances were paid off.
But later on Chase Bank changed the minimum payment rate from two percent of the account balance to five percent. Consumers did have the options however, they could either be forced either to accept higher interest rates to preserve the lower payment requirement or face making more late payments at the higher payment and trigger more fees or a 29.99 percent penalty interest rate.
Cardholders impacted by this action by JPMorgan Chase will recover money through this settlement. Of the $100 million dollars to be paid, 27 percent will go towards legal fees, the rest to consumers.
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I just received my check today for $25. This is an insult. I had aprx. 27K in the Chase low interest check balances in 2008 when they raised my min to 5% monthly. This was an extreme hardship and per the settlement it was to be based upon how you were charged check fees to initiate the loan and how effected you were. This was catastrophic for me. When I called in, I was told the courts took Chases word for records on who was effected – stupid. So basically, Chase just took advantage of me again. Chase also eventually found a way to raise the interest rates and so on… it was a nightmare.
Am I reading this right….$27 Million in legal fees, the victims only get a 33% refund and Chase gets to keep 33% of illegal gains ? Somewhere out there are people who will claim this as a victory for political gain but there is no justice here, just another slap on the wrist and business as usual.
Agreed, the consumer always gets screwed. Every single time.
How much of a return will each consumer get? It isn’t much. Didn’t they also receive a civil penalty of $25MM?