As Dr. Lahm has already mentioned and a number of other people have commented on this site, among the many egregious actions Chase has engaged in as part of this “for the life of the balance” change in terms, not offering a conventional “opt out” is the most overtly oppressive element, and the one with the broadest implications.
Providing a means to “opt out” of new terms changes, and then pay the existing balance under the existing payment terms, is (currently) the industry-standard practice. It’s also what Chase’s own executives have testified before Congress was supposedly Chase’s practice too. (They flat-out lied, apparently.)
Not providing a means to opt out of changes to credit terms essentially reduces a legitimate form of unsecured lending to nothing more than Mafia-style racketeering – where one side makes all the rules.
Not everyone who received Chase’s change in terms notice realized that absolutely no opt out was provided, should they respond in a timely manner to the initial notice. Researching this topic, I’ve found that some folks sent inquiry letters, and some sent what they thought was a conventional opt out request, expecting the normal consequences of paying under the existing terms, and possibly closing their account (not all credit card companies assume or require the latter).
What these people received in reply from Chase was interesting, to say the least:
Check out this link for the devious “opt out acknowledgment letter” that Chase sent in reply. It reads exactly like any standard opt out acknowledgment letter, except for one small, insidious phrase: “that you can choose not to accept.”
The letter very clearly, though, states the following:
“Please accept this letter as confirmation that your account will not reflect the change(s) in terms…”
“We have closed your account at your request and it will remain subject to your current terms…”
Two months later, these same Chase account holders received their monthly statement, only to find that they were in fact victims of the same extortionist “bait and switch” maneuver that befell hundreds of thousands other folks: a new $10 finance charge, and a minimum payment equal to 250% of what it was before. Like others, upon calling “customer service,” they found the latter effectively being used as a coercive lever to get them to accept Chase reneging on its previous agreement (and its own opt out letter text), and agree to double the balance APR as “an alternative option.”
That’s not an “opt out” – it’s just another form of deception.
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on Feb 18th, 2009 at 10:19 pm
Quoteing Dr Lahm regarding Chase’s testimony before congress
“They flat-out lied, apparently”
They must have felt very comfortable engaging in the normal activity for congress and thier guests.
Forgive the obvious point
on Feb 18th, 2009 at 10:22 pm
Sorry Dr Lahm, I see now that it was not your post. Rightfully the comment should be attributed to Credere
on Feb 19th, 2009 at 7:04 am
Hi Marv,
Changes here at ChangeInTerms.com are happening, too. But in this case, change is good. More and more individuals are contacting me, and some are volunteering to help me.
Therefore, even though the site started as “me,” because there are so many people who have been abused by credit card companies, it is the work of “we” who intend to bring misery to Chase. That being said, there’s still plenty of work left to do.
on Feb 19th, 2009 at 10:25 am
Strange, I got exactly that same opt-out confirmation letter on one of my accounts, and I did not get the $10 fee or increased minimum payment on either the January 2009 or February 2009 statement. Maybe the opt-out notice they sent did not sufficiently identify what change in terms notice they were declining?
On my second account, where the opt-out letter was sent later, Chase’s reply was much more devious—all they said was, “We like to speak with you to discuss your options… please call us at…” I didn’t call them. While they didn’t close the account, neither the $10 fee not increased minimum payment appeared on either my January 2009 or February 2009 statements. Writing to Chase again by cerified mail with a second notice of opt-out and asking them to confirm the opt-out, Chase simply didn’t reply. Entrapment?
on Feb 19th, 2009 at 1:29 pm
Chris -
I do not know all the details of every case I came across where account holders received this letter as Chase’s reply, but I do know that in many, possibly even most of them, the account holders had included a copy of the change in terms notice with their original letter, and the change in terms was the same one Dr. Lahm has been wrestling with.
Your comment, though, points out a good reason for doing that. Including a copy of the notice with one’s letter is something I consider good “standard practice,” for this very reason. I’ll touch more on that later in another post.
on Feb 19th, 2009 at 5:27 pm
I’m not sure if including a copy of the change in terms notice with the opt-out letter is such a great idea, particularly when the notice lacks an opt-out provision or you also don’t agree with its proposed opt-out provision.
In my opt-out letters, I did not include a copy of the change in terms notice, but instead merely referenced the notice by the November 2008 statement that it was included with and the notice codes on it at the bottom, and paraphrased in my letter the major changes it proposed that I don’t agree with ($10/fee and higher minimum payment). I said I do not the notice at all, and therefore none of the changes may become part of my cardmember agreement, and if the changes do appear on my account, they will be considered unlawful, outside the scope of the actual cardmember agreement in effect, and subject to dispute.
One wonders, if including the change in terms notice alerted and its description of (or lack therefore of) opt-out language alerted the opt-out reviewers on how to not handle the request. I specially chose not to include the opt-out letter because I totally rejected everything in the notice, including their proposed method of opting-out of the changes contained within it, and I wanted to make this crystal clear to them that it doesn’t matter what the notice actually says, I reject the thing in its entirety to full extend of my rights under the cardmember agreement itself (which is the only controlling document, actually).
on Feb 20th, 2009 at 10:24 pm
Possible partial opt-out? Last month I sent a certified letter asking that my account be closed, and that I be allowed to finishing paying off the loan under the original terms. Chase replied with a letter stating that the account had been closed, but that the change in terms would still apply. They indicated that the only way to avoid the $10 per month finance/service charge and higher minimum payment was to accept their higher interest offer. But, today I received my February statement and was pleased to see that there was no $10 “Screw you Customer” transaction this month. Instead, the finance charges consist solely of the interest charges on my remaining balance, and the effective annual percentage rate has dropped back to where it should be. They’re still requiring a 5% minimum payment, but at least everything I pay this month is going towards my balance plus legitimate interest charges. I hope that they’ve realized that they’re on really shaky legal ground with that $10 per month charge, and have decided to back off. But, I’m afraid to contact them for clarification in case it reappears. Anyone else in this boat?
on Feb 21st, 2009 at 1:24 pm
@Gayle –
Was the letter you received exactly the same (wording wise) as the one linked to in this post?
Your “partial opt out” situation is the first example of this I’ve come across. Interesting! Please keep us posted here if anything changes.
@Chris –
I agree with your general assertions re: one-sided contract changes, but that issue goes clear to the Cardmember Agreement itself (it includes a clause which essentially tries to say “we can do whatever we want,” the type of which I’ll be posting about later).
As far as I know, the only people who have not had these changes “rendered” to their account (i.e. switched on), are the folks who filed a formal OCC or FDIC complaint *before* the terms went into effect. I could be wrong on that, but so far I’ve not come across an exception to that, other than Gayle’s unusual case above.
on Feb 22nd, 2009 at 3:11 pm
My letter was a more generic account closure letter “We regret that you have chosen to close your account, please be assured that we have closed your account as requested…….
It does not indicate that the closure was in response to my failure to accept the new terms, despite the fact that my certified letter specifically mentioned that I chose to opt out and continue paying under the original terms.
However, a letter I received the following week (in response to a complaint to my state’s Attorney General’s Office) contains the following statement. “as you may know, the notice explained that beginning on the first day of the billing cycle that included Jan 1, 2009, a $10 monthly service charge would be assessed, and the minimum payments would be increased to the greater of 5% of the outstanding balance or 1% of the balance plus applicable fees and finance charges. It also explained that you had the option of closing your accounts and paying your current balances in full within 30 days of the billing statement in which the first $10 appeared to avoid the changes. While our records reflect that your account was closed on January 23, 2009, since your account balance has not been paid in full, this will not prevent the new terms from taking effect.”
But, as I mentioned above, my February statement does not include the $10 fee although the minimum payment is at 5%. Hopefully this is a sign that Chase is beginning to back down and not a billing error that they’ll “correct” next month. Keep up the fight! Please let me know if you would like copies of any of my correspondence.
on Feb 26th, 2009 at 3:57 pm
Whoops- spoke too soon. The $10 “screw you customer” charge appeared on my account just after the statement date.
on Apr 28th, 2009 at 11:46 am
On ONE late payment of three days, Chase increased my credit card interest rate from 7.99% to 29.99%! No opt out provision was tendered.
Is there a class action lawsuit working for Texas residents?
Is there a law firm willing to file a class action suit on behalf of Chase’s Texas residents similarily burdened?
Thanks.
DMH
on Jun 23rd, 2009 at 11:16 pm
Help! I have gotten my “Changes to your account notice” dated 06/09. This notice includes no “opt out” info what so ever. Should I do what Chris did on his 2/19/09 post and reject the changes? I have no problem paying what I owe, but at this point i can not afford the increase to 5% of my outstanding balance with just one of us working… Help