Consumer advocate: 'I have never seen a credit card practice this abusive.' Usury is the Mind Control weapon of choice by top U.S. companies.
Until recently, Brian Woods of Akron, Ohio was a happy Chase Bank customer. Several years ago he accepted a promotional offer to use the bank’s “Lower than Prime” balance transfer checks to move high interest debt to his Chase credit card. The Chase solicitation promised: “No tricks. No gimmicks. Just savings.”
The offer was straightforward. Woods would pay a 3 percent transfer fee and get an amazingly low interest rate of 3.99 percent APR “until the balance is paid off.” Woods says he paid “on time, every time” in order to keep that interest rate.
Woods became an angry Chase customer when he received his January statement and saw a $10 “monthly service charge” had been added. The bank also bumped up his monthly minimum from 2 percent to 5 percent sending his payment from $140 to $300.
“I’ve seen banks do screwy things before, but this was the most blatant breach of contract I’ve seen a bank do,” he says.
Woods called Chase customer service and was told the bank would drop the monthly fee and return the minimum payment to 2 percent if he agreed to a new interest rate of 7.99 percent for a year. After that, he was told, the rate could go even higher.
“I said no, that’s blackmail, I’m not doing it,” Woods tells me. He got off the phone and contacted a lawyer.
This was not an isolated case. Last November, Chase notified about 400,000 people with these low interest cards their minimum monthly payment would more than double and a $10 monthly service fee would be added.
“I have never seen a credit card practice this abusive,” says Joe Ridout with Consumer Action, the San Francisco-based advocacy group. “The people who accepted this offer were those who really read the fine print. They understood the fine print. Then Chase went and erased the fine print and wrote some new fine print that was very advantageous to the bank and lets them gouge their cardholders.”
Class-action lawsuit filed
Earlier this year, Woods and another unhappy customer filed a class-action lawsuit against Chase. The suit claims Chase engages in “unlawful, unfair, and fraudulent business acts and practices.” It also alleges the bank violated the federal Truth-in-Lending Act.
What do I need to do?
If you are one of the Chase customers who had this happen to you, you don’t need to do anything right now. If the lawsuit is certified as a class action suit and there is a settlement, you will be notified by mail. The New York firm of Giskan, Solotaroff, Anderson and Stewart is handling this case.
The suit blasts Chase for “taking advantage of its customers, many of who are suffering extreme economic hardship by essentially ‘welching’ on its promise …”
All credit card issuers, including Chase, have provisions in their member agreements giving them the right to change the terms at anytime for any reason. The lawsuit argues this language does not allow Chase to change “the main terms” of the contract – a fixed rate for the life of the loan as long as you are a customer in good standing.
Attorney Jason Solotaroff who’s working on the class action lawsuit says his clients, Chase customers, were never told a fee could be added.
Why did Chase do this?
Chase will not comment on a pending lawsuit, but the company e-mailed me a statement. “Tens of millions of Chase customers have taken advantage of our promotional low rate financing over the last five years,” writes Stephanie Jackson, first vice president for public affairs.
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