New York Attorney General Andrew M. Cuomo announced on March 30, 2009, that his office has secured an agreement with Chase Bank USA, N.A. (Chase Card Services) through which the company will refund (or has refunded) the $10 per month service charge that has been the subject of plenty of angst for at least some of us who were account holders that Chase “aimed at,” with its now infamous change in terms notice.
I was not completely pleased to see the press release call the $10 per month a “service charge,” but it was obvious that the fact that it “is a finance charge,” was noticed. (I know this, because unlike some members of the media who keep repeating the Chase verbiage (deceptive spin), using the terms ”service charge” or a “fee,” the Attorney General’s release also stated: “This extra $120 per year in additional fees significantly raised the effective APR on these balances, in some cases more than doubling the effective interest rate.”)
The refunds will apply to 184,000 credit card accounts and amount to approximately 4.4 million dollars. Still, there is a discrepancy here, comparing 184,000 with the other number, 400,000, which we’ve seen quoted in numerous articles (it could be explained perhaps, by noting that the NY Attorney General’s settlement may not have included every impacted account holder — I am sure we’ll learn more, later).
Special Counsel Carolyn Fast, Assistant Attorney General Melvin Goldberg, and Bureau Chief Joy Feigenbaum of the Bureau of Consumer Frauds and Protection handled the investigation and secured the agreement with Chase. Since the Bureau supervised the process, I would like to especially thank Bureau Chief Feigenbaum (please join me, here is a link to the contact page).
In the press release Attorney General Cuomo was quoted to say:
My office will not sit back and allow banks to promise one thing in its solicitations and agreements with consumers, and then when times get tough, change the deal, leaving consumers holding the bag. Truth-in-lending laws prohibit this very conduct. I am glad that Chase has now reconsidered its ill-advised decision and will now live up to the terms it originally offered and agreed to.
I would note that the Attorney General was less direct in the passage above, but when Chase’s executives decided to do something that the Truth in Lending Act prohibits, this is the same thing as saying, “Chase broke the law.” After Chase sends out the “letters to consumers nationwide, including thousands of New York consumers,” as per the NY Attorney General’s demands, we at ChangeInTerms.com are also still demanding the press release that rescinds not only the “finance charge,” but includes the apology for having dissed and defamed 400,000 account holders in an effort to portray this illegal act as being justified.
You know the other reason I am demanding an apology? Because I happen to know it is the one thing that Chase’s legal department will not want to do. It’s like throwing water on the Wicked Witch of the West:
You cursed brat! Look what you’ve done! I’m melting! Melting! Oh, what a world, what a world! Who would’ve thought a good little girl like you could destroy my beautiful wickedness? I’m gone! I’m gone! I’m going!
Further, I have previously mentioned that I think for having inappropriately defamed those of us who were affected, we also want letters sent for each account holder, to each of the three credit bureaus. The whole “these were deadbeats who were ‘only a small percentage’ who were taking too long to pay off loans” portrayal, was really a nasty thing to say about us given that in fact, we were meeting our obligations. And, I for one, think we deserve to see Chase’s wicked stirrers of such a cauldron of illegal swill and misrepresentation exclaim, “We are melting!”
Last but not least, even when the above demands are met, Chase’s decision and actions should not be punished with a simple “slap on the hand” in the form of a refund of the $10 “FINANCE CHARGES.” In the course of perpetrating this illegal attempt to ”change the deal,” Chase created unnecessary pain and damage; Chase caused thousands of account holders to incur costs so as to escape its tyranny; Chase defamed us with a negative portrayal in the media; Chase played a game of obstruction; Chase treated us as prey; Chase hurt small businesses; and from my family, Chase Card Services Stole Christmas (and by no means is this to be construed to suggest that my briefly sketched list even comes close to describing all of the damage inflicted upon hundreds of thousands of account holders who have had to have a “heart, courage, and brains” just to deal with the Chase’s heretofore unbridled abusiveness).
All along, Chase’s spokespersons continuously defamed “us” responsible account holders as individuals who were taking too long to pay as a deflection before members of the media (who frankly did not did deep enough) to justify this illegal act. I have previously proposed that the perpetrators of the illegal act, who have also established that they are willing to lie before Congress and defame account holders, be punished in a manner which seems to be necessary when dealing with bullies. It can’t simply be, “bully, give the money you just took back.” The bully will try again, and again, and again. Why not, when the only risk is that it if caught, what was taken will have to be returned?
The whole idea with a bully, is to indicate in no uncertain terms that if it messes with people, there will be consequences that are severe enough to suggest that the risk is not worth it. Chase’s handling of this whole debacle has caused me to always think of “options” and “alternatives.” Accordingly, I think one fitting punishment (in addition to the non-negotiable press release and letters to the credit bureaus) would be crediting accounts such that balances held by affected account holders are set to zero.
Since Chase did not give account holders an “opt out” despite previous Congressional testimony (through which Chase’s executives used opt outs to illustrate the means by which account holders were treated “fairly”), I think the “alternate option” relative to setting account balances to zero, should be refunding all of the interest that has been paid to date on accounts, and (recalling that Chase wanted to double interest rates as its coercive strategy), providing zero percent interest rates “Until balances are paid in full.”
The line of reasoning relative to this “alternate option” being that it might serve as an ample warning to ward off future attempts at bullying, if a loan that was at 3.99%, which Chase wanted to double to 7.99%, was required to be reset to zero percent. With rounding, this amounts to what was to be a “plus 4%,” resulting in a “minus 4%,” instead — seems like a “just punishment” to me. The preceding is presented as an average example to make a point — future “ill-advised” and illegal actions must be deterred; other loans were promoted at 2.99% and 4.99%, for instance, and for the sake of simplicity, I would propose resetting those rates at zero, too. Otherwise, refunding the illegally collected ”finance charges” means to Chase: if at first you don’t succeed in fleecing victims (not that this incident is the first time Chase has abuse consumers), try, try, again.
Meanwhile, “Who would’ve thought a good little college professor like me would organize a resistance, set out to de-market you, and destroy your ugly wickedness, Chase?”
Noting that it is April Fool’s day, just thought you should know, Chase, the above remarks are no joke:
NOW WE’RE (STILL) COMING AFTER YOU
Loading ...
on Apr 1st, 2009 at 12:40 pm
Good post- keep after them! I assume that 184,000 represents those of us remaining from the original 400,000 that did not opt to 1) either pay their accounts off in full, or 2) accept the higher interest rate in exchange for avoiding the fee and keeping their minimum payment at 2%. Chase probably has no intention of making any sort of restitution to the individuals in groups 1 and 2. I’m in group #3- I choose to attempt to make the increased payments despite the devastating effect that tripling my payment has had on my life because I didn’t want to let Chase get away with increasing my rates. As of this morning, my account has been reimbursed for the illegal finance charges, although I don’t see any any indication that they are going to reverse the illegal finance charges on those illegal finance charges. (not a large amount for me, but when we’re talking a couple of months of illegal finance charges on 4.4 million…..).
If Chase is allowed to get away with simply reversing the illegal finance charges on 184,000 of us, they’ve accomplished their objective. They succeeded in eliminating over half of their least profitable accounts. These accounts have either been paid off in full, or converted to more profitable interest rates. I agree strongly that some sort of punative action is called for, and think that your suggested measures are appropriate.
I’ll keep writing to anyone/everyone that I think might be able to help.
on Apr 1st, 2009 at 1:18 pm
Here’s a copy of my latest communication to the N.Y.A.G.
“Thank you for your efforts on behalf of Chase customers who were adversely impacted by the illegal $10 per month fee.
However, the illegal finance charges were only part of the strategy used by Chase to rid their portfolios of customers that just weren’t profitable enough. They also tripled the minimum monthly payment on these low interest accounts from 2% to 5%. While I generally applaud efforts to encourage customers to make larger payments, this dramatic change in the minimum monthly payment came at the worst possible time for many consumers, and with no advance warning. Most families are struggling just to make ends meet, and a tripling of their monthly payment (with no phase-in) couldn’t be squeezed out of their budgets. Unfortunately to avoid the increased monthly payments, many cardholders were forced to accept Chase’s alternative offer of a much higher interest rate that is subject to increase. Other cardholders were able to pay off their accounts in full -some by cashing in their future retirement funds. I assume this is why Chase is only going to refund charges to 184,000 customers rather than the 400,000 originally targeted. Even with the action of the A.G., Chase has been wildly successful in their original goal. Over half of their low-rate customers have been purged from the books. They have either paid off their accounts in full, or have been converted into high rate, more profitable customers.
Please take further action to ensure that such tactics will not be successful in the future, and will not be adopted by other credit card companies.
Thanks again!”
on Apr 1st, 2009 at 2:05 pm
Why Chase still comes out on top:
http://www.filife.com/stories/cuomos-crowing-effectively-endorses-chases-draconian-change-in-terms
on Apr 1st, 2009 at 2:36 pm
Hi elly,
We will win by virtue of a consumer revolution and a rejection of these abusive behaviors by exacting PR consequences and an erosion of the customer base for credit card companies. The NY Attorney General’s main contribution is that we can now say authoritatively (whereas the class action lawsuits only provided cover to say allegedly), that Chase violated the Truth in Lending Act. Keep in mind that the settlement made between the NY A.G. and Chase does not really represent all parties as complainants. I am just about to post class action lawsuit #13, for instance!
The author of the article to which you linked is correct about the lack of media attention — that will always be a major problem as long as the credit card companies buy so much advertising.
Nevertheless, keep in mind that Chase “comes out on top,” only if we stop. Regards.
P.S. The most potent form of PR, whether positive or negative, is spread by word-of-mouth, such that a cultural understanding ultimately exists regarding the “reputation” of a person or other entity. I look at the site visitor statistics here, and find satisfaction every day, knowing that there are thousands who have now been warned about Chase.
on Apr 1st, 2009 at 2:43 pm
Awesome, Gayle! Thanks for leading the way by sending that, and posting an example.
on Apr 1st, 2009 at 3:37 pm
great letter!
I send a thank you note to the attorney general’s office as well, noting that the 5% repayment is still happening…
on Apr 1st, 2009 at 6:29 pm
I believe that Chase knew very early on that they had a major problem on their hands, and here is why.
Background:
Sold our home at the end of December.
Turned in our loan paperwork for a construction loan the first week of february.
I have two Chase Accounts, which I had been monitoring closely and paying extra on, so as to guarantee an acceptable debt to income ratio
One account has a closing date of the 5th and the other the 10th. So I had logged in to my Chase Account to check the minimum payment due, on the closing date of the 5th only to discover the 5% minimum. This discovery caused me a great deal of anger and near panic. I subsequently took out this frustration on a Chase customer service representative.
Even though I had the resources to pay the 5% minimum on both accounts, I feared being in jeopardy of qualifying for the construction loan I was applying for.
THIS IS THE IMPORTANT PART OF THE MESSAGE:
I called Chase again that night and agreed to the 7.99% rate until 2011, on both Chase accounts, but made clear to them I was only agreeing to the “change of terms” because I was being forced too by them, and by my current circumstances of applying for a construction loan to build a new home.
THEY SAID
They would send me another copy of the “Change-in-Terms” brochure which I honestly had overlooked in my bill – They never sent it
The 7.99% rate would be applied to my next statement on both accounts – I WAS NEVER CHARGED THE NEW RATE of 7.99% on either account, EVEN THOUGH I AGREED TO IT.
In my case and most other peoples they just can’t claim no harm, no foul, and walk away. They letter they sent claiming that I had “incorrectly” been sent a change of terms on one of my accounts is laughable (What about my other acoount). I BELIEVE that I and many others have been harmed by the “Change-in-Terms”. All of us have our stories of how we have been harmed by Chase’s actions.
Perhaps I need to call Chase and needle them as to why I only received the “incorrectly” letter on one of my accounts, and why was I never charged the 7.99% on either account.
If I can help further in any way let me know.
Best to all!!!!!
on Apr 3rd, 2009 at 7:24 pm
After I saw this post, I have one thing to say “youtube…ELO Eldorado overture/can’t get It out of my head… Mariofear4500″ vol. 7 to 10. This is what the wife tells me,but it makes me feel better after a hard days work. IT MUST BE THE RUBY RED SLIPPERS,WON’T GIVE THEM UP WITH OUT A FIGHT!!!!!!!
on Apr 7th, 2009 at 2:37 pm
I’ve followed your website faithfully since
this crap with Chase began.
Thank you so much for your wonderful and insightful
writing and your gumptions and chutzpah.
Yes! yes! yes!
Best to you –
CreditCardJihad
on Apr 7th, 2009 at 10:31 pm
chase was up to no good when they pulled this childish stunt. what were they thinking?
Advanta bank has done far worse, without any opt out notice, has jacked up a “guaranteed for life” 7.99% rate to over 35% which is criminal usury in n.y.
send me an e mail, i’ll fill you in
cloudcowboy@aol.com
on Apr 8th, 2009 at 10:10 am
“has jacked up a “guaranteed for life” 7.99% rate to over 35% which is criminal usury in n.y.”
What???????????????????????????????????
on Apr 9th, 2009 at 2:04 pm
Yesterday Bof implemented the same minimum payment increase (without the 10.00 monthly finance charge) because they saw from Chase that they could. They used the same language which indicates to me that Chase attorneys believe this is a viable stance and based it on the economic picture rather than individual customer defaults. So how many millions of taxpayers are entangled now? If the NY AG had pressed for a full reset of our accounts I don’t believe Bof would be ignorant enough to press their increases…monkey see, monkey do.
on May 8th, 2009 at 12:51 am
[...] (ibid). That’s typical, but the New York Attorney General flatly said that “Truth-in-lending laws prohibit this very conduct.” Chase apparently even tried to infer that because “there were ‘no [...]