JPMorgan Chase will have to pay $ 2.5 million to secretly collect additional fees on crypto purchases
After fighting a legal case for two years, the largest bank in the United States, JPMorgan Chase will pay $ 2.5 million to settle a class action lawsuit for additional fees on cryptocurrency purchases.
In 2018, the plaintiffs, Brady Tucker, Ryan Hilton and Stanton Smith, filed a lawsuit against JPMorgan in Manhattan federal court, accusing the bank of charging customers additional fees in the form of cash advances for purchases of cryptocurrencies made with Chase credit cards.
JPMorgan T&C secretly updated
The problem started in early 2018 during the bullish cryptocurrency market period, when several banks, including JPMorgan, decided to prevent their clients from buying cryptocurrencies with credit cards.
However, JPMorgan did not immediately inform customers that it had begun treating credit cards purchases of digital assets as cash advances. The banking giant only announced this update ten days after implementing the changes, a move that the plaintiffs considered to be a violation of the cardholders' terms of service.
Tucker, who initially filed the lawsuit before filing an amended complaint with Hilton and Smith, claimed that Chase not only charged him additional fees but also charged higher interest rates on cash advances. According to him, the bank refused to refund the excess fees after calling the bank to complain.
During a recent hearing, Chase Bank argued that its cardholder agreements did not actually change and that cryptocurrencies are basically "as cash" as they also function as a medium of exchange. Therefore, no prior notification to customers was required in this case.
JPMorgan noted that the cardholders who filed the lawsuit could not claim that the bank violated its agreements with customers when it stopped buying cryptocurrencies with credit cards and began treating them as cash advance activities, attracting additional fees and higher interest rates.
In addition, the bank claimed that the cryptocurrency exchange Coinbase It also changed its merchant category from "purchases" to "cash advances", which led to the adjusted rate.
Lawsuit settled but Chase not bad
In the legal action from the trioThey requested full refunds of all illegal cash advance charges, $ 1 million in legal damages, and an order stating that the terms of the JPMorgan cardholder do not allow the bank to impose such excessive charges on the purchase of cryptocurrencies.
In a motion filed last week, Reuters reported JPMorgan agreed to settle the class action lawsuit with a payment of $ 2.5 million. However, the bank did not admit to any crime as part of the settlement agreement.