MANHATTAN (CN) – Customers riding the cryptocurrency wave through Chase Bank claim in a class action that “new fees and sky-high interest rates” that accompanied the transactions violated truth-in-lending laws.
“Those ultra-high finance charges began accruing immediately on the transaction date, rather than after the end of a billing period, as with an ordinary purchase,” according to the April 10 complaint filed in Manhattan.
Represented by Finkelstein & Krinsk attorney David Harris, lead plaintiff Brady Tucker wants to represent “hundreds if not thousands” of Chase customers who learned that Chase treated their crypto purchases on Coinbase.com as “cash advances.”
“Based on plaintiff’s and the class’s longstanding experiences with Chase under their cardholder agreements, plaintiff and the class believed they could pay off their crypto purchases before their credit card due-dates without incurring any finance charges,” the 18-page complaint states. “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.”
Idaho-based Tucker quotes Chase CEO Jamie Dimon mocking bitcoin as a “fraud” that was “worse than tulip bulbs.”
Speaking on the subject in September 2017, Dimon said he would fire any employee found buying bitcoins “in a second.”
“For two reasons: It’s against our rules, and they’re stupid,” he said.
Though Dimon later apologized for the remarks, Tucker claims his initial views toward the currency spilled toward the bank’s customers.
“It appears that in addition to firing its ‘stupid’ employees, Chase elected to start fining its ‘stupid’ customers: unilaterally,” the complaint states. “Chase made no effort whatsoever to notify its cardholders that they would begin incurring lofty cash advance fees and interest charges on all of their crypto purchases in real time.”
Customers who complained about the charges, Tucker said, found that Chase passed the buck elsewhere.
“When plaintiff and other Chase cardholders have done so, Chase has responded by summarily (and deceptively) placing the blame on Coinbase,” the lawsuit states (parentheses in original).
Tucker demands that Chase pay actual damages to the class plus $1 million in statutory damages for one count of violating the Truth in Lending Act.
Chase did not immediately respond to an email request for comment.