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Chase Class Action #5 Filed in Ohio; Injunction Sought

Lawsuit #5: Class Action Lawsuit Filed In Cleveland Against JP Morgan Chase & Company(we like it!).

Feb. 13, 2009

Cleveland, OH – A class action lawsuit has been filed in the Cuyahoga County Court of Common Pleas against JPMorgan Chase & Co. on behalf of its credit cardholders. Credit cardholders are alleging that Chase engaged in “unconscionable” and “unfair” acts against it own customers.

Chase cardholders were originally offered balance transfers on their accounts with fixed annual percentage rates of 2.99%, 3.99% or 4.99%, until the balance transfers are paid in full. In accepting Chase’s promotional offer, customers either transferred balances to or borrowed money from their Chase credit card accounts. Commencing January 2009, Chase unilaterally, and without reasonable notice to its customers, changed the terms of these accounts. Chase began charging its customers a monthly transaction fee of $10.00 and increasing the minimum monthly payment from 2% of the account balance to 5% of the account balance-representing an increase in the minimum monthly payment of 150% [sic*]. Cardholders who are unable to make the increased monthly payment are forced to accept a higher interest rate. Cardholders assert that Chase breached its promotional balance transfer agreement, committed fraud and violated the “Truth in Lending Act.”

“The fact that Chase is treating its customers this way is absolutely mind-boggling,” says James Boulas, the attorney filing the class action lawsuit. “Apparently being bailed out by the taxpayers wasn’t enough,” Boulas continued. Last year JPMorgan Chase received $25 billion in government TARP funds.

Boulas is also seeking a Preliminary Injunction in the Cuyahoga County Court of Common Pleas ordering JPMorgan Chase to cease these practices immediately and to comply with the terms of its original agreements with its card holders. A hearing is scheduled for Tuesday, February 17, 2009 at 9:30 a.m. in Courtroom 16B of the Cuyahoga County Justice Center.

* The above article quoted by Lyn states “an increase in the minimum monthly payment of 150%,” but it’s important to note that the net effect of that “150% increase” is that the minimum payment ends up being two-and-half-times larger than what it was before the change.  For example, on a $10,000 balance, the old payment at 2% of the balance would have been $200, and at 5% of the balance the new payment amount (a whopping increase) would be $500.  Multiplying $200 times 2.5, we find that the new payment is $500, which confirms the calculation.

— editorial review.