Late January 2018, JPMorgan Chase & Co announced that it will stop allowing credit purchases of cryptocurrencies. This move was a response to the dangerous volatility in the market starting in 2017. Back then, investors would be greatly convinced by hype and purchase large amounts of cryptocurrency on credit. This trend posed a great financial risk for the banking industry as a whole because customers may not be able to pay for the purchases when the market would drastically go down. JPMorgan Chase & Co noticed the trend and decided to just stay out of it.
Many other banks in both the US and UK followed suit and prices of cryptocurrencies were seen to have plunged from $20,000 to $11,000 within December to January alone – exactly when credit purchases were being disallowed by the banks.
Right after the credit service was no longer being offered, surprise charges were imposed on clients. As a response, a lawsuit with the charge of overcharging clients has been filed against JPMorgan Chase & Co in Manhattan’s federal court. The lawsuit details that customers were charged with extraordinarily high-interest rates on cash advances versus the usual credit card fees. Extra fees were being charged without the customers’ knowledge.
At first, Tucker went through the usual process of complaining through the customer service line. When the bank refused to refund said card charge, he then proceeded to file the lawsuit.
JPMorgan Chase & Co spokesperson Mary Jane Rogers refused to comment on the accusations. She only cited that credit purchases of cryptocurrencies had already stopped as of February 3. Customers may continue purchasing cryptocurrencies through debit cards which would mean that there will be no charges for cash advances.
To cite the extent of the overcharging, Brady Tucker, the Idaho resident responsible for filing the lawsuit, disclosed the details of his experience. For transacting five times between January 27 and February 2, he was billed for $163.91 ($143.30 in fees, and $20.61 in interest) in surprise charges.
Furthermore, no warning of any kind was made before the surprise charges went through nor was there any information on how the charges were calculated. This violated the US Truth in Lending Act where credit issuers are required to disclose all details involved when there are major changes in amounts charged to customers or in the terms on which these are charged. For this, Tucker as the plaintiff raised a $1 million claim for actual and statutory damages.