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.

– ChangeInTerms.com editorial review.

© lyn for ChangeinTerms.com, 2009. | Permalink | 7 comments | Add to del.icio.us
Post tags: abusive lending, Chase, chase credit card complaints, chase credit card fee, Class Action, JP Morgan, Ohio

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Chris has just informed me that,

“The complaint has been filed…”

This may take a while (most do), but at least one law firm has taken enough interest in this matter to do something about it. Chase deserves the suit, it deserves to lose, and it deserves to be punished. Frankly, it’s just been astounding to me how far Chase went in crossing the line with so many people (while taking bail out money, too).

Here it is, the actual Class Action Lawsuit against Chase Card Services! Yippee! I am rejoicing over this. Maybe the media will take notice, and make Chase apologize so that we can get this over with even sooner. But I’m willing to wait as long as it takes, and advocate for justice in any and every way possible, until it is received.

© Dr Robert Lahm for ChangeinTerms.com, 2009. | Permalink | 10 comments | Add to del.icio.us
Post tags: change in terms, Chase, chase credit card complaints, chase credit card fee, Class Action

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Just this morning, I received a notice from the BBB in Delaware to the effect that my complaint against Chase has been “adequately resolved.” The BBB was apparently satisfied that Chase had made an attempt to work with me because it sent a letter offering me a 7.99% rate (doubling the current rate). Never mind that Chase previously promised 3.99% in its promotions and correspondence directly with me. So, apparently, any answer from Chase will do as far as the BBB is concerned.

I would remark that the BBB has some really cool online software for submitting a complaint, even though I think it may circumvent any need for humans to engage in sense-making (on the part of BBB representatives).

Let me guess, will the OCC soon send a similar note: “We have determined that Chase can engage in deceptive marketing practices, lie to customers, and lie before Congress,” as long as it sends a letter informing you (the customer) that it will gesture with an “olive branch” and provide an alternative (screwing you, by doubling the rate)?

It still causes me to wonder, is there still a sense of “right or wrong,” anymore?

© Dr Robert Lahm for ChangeinTerms.com, 2009. | Permalink | 10 comments | Add to del.icio.us
Post tags: Chase, chase credit card complaints, chase credit card fee, Congress

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Users of the product can customize messages and then print their own T-Shirt artwork, if they wish to join in the protest against credit card company abuses “at any time, or for any reason, or for no reason,” quipped Lahm, who has been a stanch advocate against credit card companies’ use of similar wording in some card holder’s terms of service agreements.  The kit can also be used to create and send customizable messages to anyone a user likes (just print on regular paper): “credit card companies, Congressional representatives, journalists, you name it!,” said Lahm.

Several of this product’s preloaded messages are associated with observations about the impact that Chase’s new change in terms notice may have not just on account holders (as noted in the Wall Street Journal, and elsewhere), but on the economy at large, as Americans continue to struggle despite the bail out. The aforementioned notices were distributed by Chase over the last several weeks, and took effect as of January 1, 2009. Their primary characteristics were raising monthly minimum payments from 2% to 5% of the account balance, adding a $10 monthly “finance charge” (even if the account has no balance), and providing no “opt out,” which is contrary to a previous statement delivered by a Chase marketing executive in testimony before Congress. In the absence of an “opt out,” says Lahm, the consumer has no “escape hatch,” and is trapped.

While these changes could prove to be devastating to consumers, Lahm is just as concerned about the impact on individuals who are operating small businesses. Citing SBA (Small Business Administration) figures, he has indicated that over 99% of all businesses, are small businesses. According to his academic research, about which he has previously provided testimony before before Congress himself, entrepreneurial “bootstrappers” (people who start a business with little or no capital) comprise the majority of all start-ups, and they often rely on both personal and business credit cards.

In the case of his own loan with Chase, which was originally promoted as one that had a “fixed rate” of 3.99% for the life of the balance, Lahm estimates that his payments will skyrocket from $239 per month to almost $600 per month on a balance that is just under $12,000. Most of his debts (discussed on his site and in an eBook he also published entitled, “How Chase Card Services Stole Christmas“), are associated with attending graduate school, which included some challenges along the way. His intent was to become academically qualified to teach at the college level, and he is now an Associate Professor of Entrepreneurship. Lahm outlines his payment history, which he states has been flawless over many years and types of obligations, both commercial and consumer oriented in nature.

ChangeInTerms.com is a consumer protest site, created by Dr. Robert Lahm (Western Carolina University entrepreneurship professor), in response to credit card companies and their mistreatment of many account holders (including himself). The site provides vibrant discussion and analysis, links to government, regulatory, and advocacy organizations, and sometimes more than a little sarcasm — along with serious critique — about the activities of credit card companies both individually, and as an industry. While the site laments that it can’t actually change terms from a legal perspective, it submits that they can be changed with credit card companies from a consumer perspective. The site’s description declares to credit card companies: NOW WE’RE COMING AFTER YOU.

© Dr Robert Lahm for ChangeinTerms.com, 2009. | Permalink | 2 comments | Add to del.icio.us
Post tags: "Bail Out", advocacy, business credit, change in terms, Chase, chase credit card complaints, chase credit card fee, Congress, consumers, credit, credit cards, debt, fees, minimum payment, notices, small business, Testimony

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The gist of the current response from Chase was that it would be willing to work with me on the same basis that has been widely circulated on the Internet.  Mainly, Chase would keep my minimum payments where they are presently (at 2% of the balance), and waive the $10/month fee (that fee was identified as a “finance charge” in the change in terms notice), if I agreed to a new 7.99% interest rate.  If I were to buckle under and do so, this would double my present interest rate (something that Chase executives could really celebrate). 

Putting it all together:

Chase conveniently ignored its own assurances to me on its own Executive Offices letterhead (October 2006);

Chase ignored the other points I raised about “opt outs” (stated as a means for treating customers “fairly” in testimony before Congress);

“3.99% fixed” is still not the same as 3.99% plus an additional “finance charge” of $10/month;

Therefore, the documentation trail clearly establishes that I was (and am) well within my rights to assert that Chase lied before Congress, and lied to me.

Obviously, any statements or assurances given to account holders who are corresponding with Chase Executive Offices, even in writing, should not be trusted.  I’ll give Chase this much, its executives have got tremendous moxie, treating customers this way while accepting “bail out” money.  I also find myself wondering why Chase is still marketing the “Freedom Card” (with a $50 sign-up bonus at the time of this writing) while it is concurrently trashing that product’s established customer base, including many people, who like me, have paid responsibly and on time, honoring our end of the borrowing relationship.  

How I do I know that so many of these account holders have been honoring their obligations thus far?  Simple: if account holders had not been doing so, Chase would have already imposed an even more usurious 30-something percent rate on those customers.  No, this evil change in terms notice was only sent to people who were paying responsibly but at a low rate that Chase no longer felt like honoring (even though the FED funds rate is at an historic low, near zero).

Oops, I may have answered my own question: Chase needs to sign up more people whom it can entrap, with its “Freedom Card.”  This is because Chase is lacking when it comes to the capacity for truthfulness and honor.  Well, we’ve all got our work cut out for us, fighting back against an organization that plays such dirty tricks.

* NOTE:  This letter was a bit “off the mark” because the author composed it as though I was complaining about a change in terms that had impacted me at the time, and I was not.  Actually, I was warning Chase preemptively that it had better not screw with me — and it should recognize that account holders are watching and learning from one another about the way it was treating customers.  My letter was prompted because of an unprovoked action that Chase had just initiated with a university colleague of mine, down the hall from me.  Chase had raised her rate to around 29%; according to what she told me, the only thing she had done wrong was co-sign her son’s student loan, so it appeared to me that Chase was playing the “universal default” game, and since I did not like what it had done to her, I wrote to JP Morgan Chase’s CEO, Jamie Dimon, and expressed my extreme dismay.  Nevertheless, Chase’s reply stated that my 3.99% fixed rate would remain in effect as long as I did not miss a payment or go over limit (and again, I have done neither).

© Dr Robert Lahm for ChangeinTerms.com, 2009. | Permalink | 4 comments | Add to del.icio.us
Post tags: "Bail Out", change in terms, Chase, chase credit card complaints, chase credit card fee, Congress, credit, FED, interest, minimum payment, Testimony

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I search for information too, and I was astonished to learn that JPMorgan Chase Card Services was the recipient of a “2008 CRM Service Award — Elite” designation (the acronym stands for customer relationship management, and is associated with CRM Magazine).  Now that really is Priceless!

I would hope that the 2009 award is given after a diligent review and judging process (unless CRM does not really care about its own brand image, or credibility). 

They might start with my “Rant-roll” posts, such as Boycott Chase, Class Action Suit, Credit Card Trauma, Horror Stories, P***ing off Even Their Very Strongest Customers, Rude to Me, and Shameful and Counterproductive.  From there, it may be useful for judges to review this post: “If you’re not happy, then I’ll close your account for you right now.”  Of course, if the judges aren’t into reading, they can see it on YouTube.  Here’s a good one to start with (in two parts): Chase Credit Card Ripoff Scam (part 1); Chase Credit Card Ripoff Scam (part 2). 

© Dr Robert Lahm for ChangeinTerms.com, 2009. | Permalink | 5 comments | Add to del.icio.us
Post tags: Chase, chase credit card complaints, chase credit card fee, consumers, credit

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For those who are brand new to this issue (or site), the basics of the notice included raising minimum payments from 2% to 5%, imposing a new $10/month “finance charge” (whether or not a balance is carried, at all): and its most sinister feature, the notice was conspicuously (and shamelessly, on the part of Chase spokespersons) devoid of an “opt out.” 

If an account holder can pay off a large balance on short notice as a lump sum payment to any bank then he or she can “get out,” but that’s not the same as an “opt out.”  Many people I’ve read about or communicated with otherwise by email, phone, or comment posts – if they are able to do so — are taking this “get out” approach in dealing with Chase, typically declaring: “I hate Chase,” “I’ll never, ever, do business with Chase, again!,” “Chase can go to hell,” or the like, in the process (see my “Rant-roll”).

An “opt out,” as previously described by Chase and others in the industry allows a customer to reject newly imposed terms by exercising the option (hence, “opt”) to voluntarily close an account and continue to pay under the old terms (at the old rate, and so forth), until the balance is paid off.

I have already cited the specific statements reassuring lawmakers that Chase was “fair” in its treatment of customers delivered before Congress by Carter Franke, who provided testimony (U.S. Senate Committee on Banking, Housing and Urban Affairs, January 25, 2007) in his capacity as Chase’s Chief Marketing Officer.  In that testimony, he used opt outs as an example to illustrate the way that Chase supposedly worked with account holders and (supposedly) treated customers fairly.   

I have noticed and commented on the similarities that can be observed in various (professionally crafted) statements delivered by Chase executives and media spokespersons.  You can be assured that they know exactly what they are doing, well ahead of time.  I have also found a similar passage, reassuring lawmakers about fairness and opt outs, relative to what was delivered by Carter Franke, in the testimony that was provided by the former CEO of Chase Card Services, Richard Srednicki.  This latter statement by Mr. Srednicki was delivered before the U.S. Senate Permanent Subcommittee on Investigations on March 7, 2007.  Excerpted from that statement, I found the following passage:

“…we let them know they have options. They can discuss the matter with us and, if they wish, they can opt out and close an account and pay off the balance at the old interest rate over time.

We do want to help customers, and we treat them as individuals.”

I’m sorry, but as a said in my letter to the current CEO of Chase Card Services, Gordon Smith (and I continue to stand by that letter as it is substantiated by the facts and documents that I have in my possession): “Chase certainly lied to me: ‘3.99% fixed’ is not the same as 3.99% plus $10.00 per month (whether or not the consumer carries a balance).”

I certainly wish that I could easily and affordably simply “get out” as some others are able to do and are doing.  I also realize that some readers here (probably those who are insensitive to the plight of individuals who, like me, took on debts, but did so expecting that they would pay in good faith, and not be mistreated by banks that are clearly acting in bad faith), might think to themselves, “What’s the big deal over $10/month?”  I’ll answer: for me, $10 is not that big of a deal from a financial point of view; rather, it’s the very frightening precedent that matters. 

The lack of an “opt out” certainly should have every cardholder, regardless of brand, on high alert. 

If Chase is not stopped, then it truly will set a precedent before the eyes of other banks, demonstrating that from here on, credit card companies shall serve as lord and master, chief tormentor and overseer in all of our lives.  I’ll bet MBNA’s only regret (it has since been bought out by Bank of America), is that it did not come up with this new idea about how to manipulate and bully customers, first.

Equally frustrating, is the fact that banks are simultaneously enjoying a FED funds rate that is so low, money is almost free to them, and our bail out money (Chase got $25 billion); yet, Chase wants to eliminate opt outs (demonstrating its “true colors” in a time of national distress: fairness is being thrown out the window at the same time). 

I want Chase to know that it has options, too.  It can leave my account the way it promised, and it can issue a press release retracting the change in terms notice under discussion here in its entirety (I won’t ask for an apology — if it acts quickly — because that seems to make lawyers “freak out”).  Alternatively, Chase can provide an opt out for all customers on this present and any future change in terms notices it may issue (like its executives stated in testimony that it would do).  Either way, I do want to see it in a press release before the public at large (apparently it’s not a problem making misleading statements in Congressional hearings). 

When I see the press release (disseminated), I will quit writing posts, rising in page rank in search engines, and doing all that I can to demarket the Chase credit card brand (as its issuer is employing deceptive marketing practices).  This increasing visibility can be atributed to the support of  ChangeInTerms.com site visitors (thank you!) – spread the word to credit card companies in general and Chase in particular:

NOW WE’RE COMING AFTER YOU

© Dr Robert Lahm for ChangeinTerms.com, 2009. | Permalink | 27 comments | Add to del.icio.us
Post tags: "Bail Out", banks, change in terms, Chase, chase credit card complaints, chase credit card fee, Congress, credit, debt, FED, interest, minimum payment, notices, regulation, Testimony

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All is not well,
All is not swell,
Things are not hunky dory,
Not for many, many Chase cardholders,
Oh no, we’re really, not.

Based on the timing of the reporter’s article, the lecture, and mail delivery, while Mr. Smith was articulating his talking points, printing presses were humming, and soon after automated credit card statement stuffers were whirring away.  He was discussing leadership, while Chase’s workforce was plotting and scheming and subsequently busy inserting the devastating little “You believed us when we promised a ‘fixed rate’ for life?  Well, we lied!  Gotcha!” change in terms notices that are about to wreak havoc and ensure that “Thanks to Chase, ‘almost a million’ people get blown away, financially.”

No, I’m afraid that when a company misrepresents offerings, and purposely employs deceptive marketing methods as a means to increase profits, this is not leadership, Mr. Smith.  Taking bail out money from taxpayers and then refusing to account for that money, is not leadership, Mr. Smith.  Lying to Congress about supposedly providing “opt outs” is not leadership, Mr. Smith.  Unbridled greed is not leadership, Mr. Smith.

© Dr Robert Lahm for ChangeinTerms.com, 2009. | Permalink | 10 comments | Add to del.icio.us
Post tags: "Bail Out", banks, change in terms, Chase, chase credit card complaints, chase credit card fee, Congress, credit, notices

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Part of this eBook’s message is associated with observations about the impact that Chase’s new change in terms notice may have not just on account holders, but on the economy at large, as Americans continue to struggle.  The aforementioned notices were distributed by Chase over the last several weeks, and took effect as of January 1, 2009.  Their primary characteristics were raising monthly minimum payments from 2% to 5% of the account balance, adding a $10 monthly “finance charge” (even if the account has no balance), and providing no “opt out,” which is contrary to a previous statement delivered by a Chase marketing executive in testimony before Congress.  In the absence of an “opt out,” says Lahm, the consumer has no “escape hatch,” and is trapped.

While these changes could prove to be devastating to consumers, Lahm is just as concerned about the impact on individuals who are operating small businesses.  Citing SBA (Small Business Administration) figures, he has indicated that over 99% of all businesses, are small businesses.  According to his academic research, about which he has previously provided testimony before before Congress himself, entrepreneurial “bootstrappers” (people who start a business with little or no capital) comprise the majority of all start-ups, and they often rely on both personal and business credit cards. 

In the case of his own loan with Chase, which was originally promoted as one that had a “fixed rate” of 3.99% for the life of the balance, Lahm estimates that his payments will skyrocket from $239 per month to almost $600 per month on a balance that is just under $12,000.  Most of his debts (discussed in the eBook), are associated with attending graduate school, which included some challenges along the way.  His intent was to become academically qualified to teach at the college level, and he is now an Associate Professor of Entrepreneurship.  Lahm outlines his payment history, which he states has been flawless over many years and types of obligations, both commercial and consumer oriented in nature.

ChangeInTerms.com is a consumer protest site, created by Dr. Robert Lahm (a university entrepreneurship professor), in response to credit card companies and their mistreatment of many account holders (including himself).  The site provides vibrant discussion and analysis, links to government, regulatory, and advocacy organizations, and sometimes more than a little sarcasm — along with serious critique — about the activities of credit card companies both individually, and as an industry.  While the site laments that it can’t actually change terms from a legal perspective, it submits that they can be changed with credit card companies from a consumer perspective.  The site’s description declares to credit card companies: NOW WE’RE COMING AFTER YOU.

© Dr Robert Lahm for ChangeinTerms.com, 2009. | Permalink | 7 comments | Add to del.icio.us
Post tags: advocacy, business credit, change in terms, Chase, chase credit card complaints, chase credit card fee, Congress, consumers, credit, credit cards, debt, minimum payment, notices, small business, Testimony

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Well, I have postulated a few things, based on what I know about banks and executives, generally, and research regarding Chase (a case study in greed).  First of all, banks rarely do anything unless its in their own interests, not yours or mine.  They use the same tried and true advertising appeals that copywriters have employed for years: “In order to provide customers with the optimal user experience [we have just taken away these six services that they used to have, and raised rates] our newly improved lending products come complete with an array of benefits, that you’ll love!”  Yeah, right, read the fine print and change in terms notices.  As I have outlined in my post about likely motives on the part of Chase executives, they too, are very likely to be self-serving. 

I acknowledge that it’s not just Chase executives who act in their own interests, we’re underwriting a life of luxury for many of the bail out recipients (while we toil in the mines, in servitude).

I have just read an interesting article on the Consumerist site, “Banks Using $700 Billion Bailout To Buy Other Banks, Not Make More Loans,” concerning Chase’s intentions in terms of the bail out money; the article is based on what I perceive to be an astute analysis of previous reporting in the New York Times.  It shows that I am not the only one who has noticed that Chase is looking to take, take, take, using our taxpayers’ bail out money to buy up other distressed banking assets.  Of course, when one couples the information in the aforementioned article with the fact that Chase is concurrently screwing its own customers (lying to Congress about providing “opt outs,” and engaging in some really despicable acts in terms of its treatment of account holders who were promised promotional rates when Chase obviously intended to trap), the picture becomes quite clear: we’re in a struggle that’s as old as the quest for freedom itself. 

The lords in banking have taken the power (because of their lobbyists and cozy relationships with regulators), and we are the serfs.  The more I learn, the more I come to reflect on Revelation 6:8: “behold a pale horse: and his name that sat on him was Death, and Hell followed with him.”

© Dr Robert Lahm for ChangeinTerms.com, 2009. | Permalink | 5 comments | Add to del.icio.us
Post tags: "Bail Out", advocacy, banks, change in terms, Chase, chase credit card complaints, chase credit card fee, Congress, interest, notices

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