J.P. Morgan Sued Over Unannounced Fees on Cryptocurrency Purchases

US bank has not notified customers about the change

by Marin Marinov
11 April • 2.5 min
In News

US banking giant J.P. Morgan Chase & Co. is sued over unannounced extra fees on cryptocurrency purchases with credit cards, Reuters reports. On Tuesday, a bank customer filed a lawsuit because the bank refused to refund the charges after classifying the purchases as cash advances without a notice.

J.P. Morgan unexpectedly charged Brady Tucker, a credit card client, with new fees and higher interest rates for five cryptocurrency transactions between January 27 and February 2. The move came days before the bank`s ban on cryptocurrency purchases with credit cards that started on February 3.

Advance Notice

Tucker does not dispute J.P. Morgan’s right to change its policy, but challenges making this without disclosure to clients. The plaintiff based his lawsuit on possible violation of advance notice law clauses in the federal Truth in Lending Act (TILA). Especially, the bank`s obligation to write to clients for any significant change in charges or terms, as stipulated in TILA 2009 amendment for credit consumers protection (the so-called Credit Card Act).

“Chase began treating all its customers` crypto purchases not as ordinary credit card “Purchases” — as Chase had for years — but instead as “Cash Advances” from Chase to the credit cardholder. When Chase implemented this change in late January 2018, Chase did so in total silence,” Tucker complaint states.

Cash advance

Cash advances fees are charged when a card holder takes out a loan of liquid funds against their credit limit. J.P. Morgan Card Member Agreement declares as cash advances “purchasing traveler`s checks, foreign currency, money orders, wire transfers or similar cash-like transactions; purchasing lottery tickets, casino gaming chips, race track wagers or similar betting transactions; and making a payment using a third party service”.


JPMorganlogo

In the case of cryptocurrency purchases, the bank’s clients were allowed to trade digital coins for USD after buying cryptocurrency with credit cards, till the ban of February 3. Several US banks, including Citigroup and Bank of America, have imposed similar bans on buying cryptocurrencies with credit cards. J.P. Morgan still allows customers to use their debit cards for cryptocurrency purchases.  

Only Tucker?

Tucker filed the lawsuit after J.P. Morgan had rejected his complaint and had refused to refund the extra charges - USD 143.30 in fees and USD 20.61 in interest rates. Although small in amount, Tucker decided to file the lawsuit and to classify it as a class action case. Class action lawsuit means that Tucker wants to represent all hundreds or thousands of clients, affected by the J.P. Morgan decision. The plaintiff seeks “additional statutory damages in the aggregate amount of USD 1 million”.

Brady Tucker lawsuit is filled in the US Southern District Court of New York (the so-called Manhattan Federal Court). You can access it through PACER, the US Public Access to Court Electronic Records with registration and small fees.

Do you think Tucker will get support from other J.P. Morgan customers in court? Feel free to share and comment.