A lawsuit has been filed on JPMorgan Chase and Co in a Manhattan Federal court accusing the bank of overcharging clients who purchased cryptocurrencies using their credit cards.
In January, JPMorgan Chase prohibited the buying of cryptocurrencies using credit cards and levied extra charges, treating the purchases as cash advances.
Customer and Idaho resident Brady Tucker has filed a suit against the investment banker for overcharging him for fees and interest for two payments of USD 143.30 and USD 20.61 for cryptocurrency transactions. It suggests that possibly thousands of other customers have also been overcharged. The investor bought USD 2,301 worth of cryptocurrencies between 15 January and 2 February and maintains that he called Chase’s customer service line to dispute the charges but the bank refused to move them.
A spokesperson for the bank, Mary Jane Rodgers, wouldn’t comment on the lawsuit but pointed out that the reason for halting credit card crypto purchases was due to credit risk. JPMorgan’s CEO, Jamie Dimon, has previously called cryptocurrency a “fraud”, saying that he’d fire any employee “stupid” enough to trade in it.
Attorneys for Tucker, Finkelstein & Krinsk LLP, a San Diego-based law firm, suggest that customers did not receive fair notice regarding the banks proposed changes, incurring “millions of dollars of cash advance fees and sky-high interest charges on each and every crypto purchase”.
The lawyers are seeking the fees returned and damages “in an aggregate amount of USD 1 million” in a class action hearing. Although the size of the class has yet to be established, it could be as many of “hundreds or thousands of members”. They accuse JPMorgan Chase of violating the US Truth in Lending Act, which requires credit card issuers to notify customers of significant changes in terms.
Several banks in the US and UK, including Lloyds Banking Group Plc, Virgin Money and Citigroup banned the use of credit cards to purchase cryptocurrencies earlier this year after Bitcoin plunged from about USD 20,000 to USD 13,000.