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.