In brief
- NY-based Chase Bank was accused of overcharging customers in 2018.
- The plaintiffs alleged they were hit with unexpected cash advance fees.
- A settlement has been reached out of court. Details have not been disclosed.
Chase Bank, the sixth largest bank worldwide, has reached an agreement to settle a lawsuit that accused the bank of overcharging customers on crypto purchases.
The subsidiary of baking giant JP Morgan Chase & Co. arrived at the settlement out of court. Further details of the settlement have not been disclosed.
Plaintiffs Brady Tucker, Ryan Hilton and Stanton Smith alleged in 2018 that Chase Bank had ambushed them with surprise charges by reclassifying crypto purchases they made as “cash advances.”
The plaintiffs allege they were not warned of this change and were unexpectedly hit with “sky-high” interest rates and fees. Tucker had said he had been charged over $160 in fees and interest for regularly purchasing cryptocurrencies from Coinbase using his Chase Bank credit card. The lawsuit initially sought $1 million in damages from Chase.
Chase Bank had argued previously that cryptocurrency purchases are “cash-like transactions” as per its terms of service––and no contract had been breached. But a judge ruled that the plaintiffs had successfully showed “cash-like” transactions only being related to fiat currencies.
In February 2018, JP Morgan Chase & Co. banned cryptocurrency purchases on their credit. And the multinational investment bank has typically taken a hostile stance on cryptocurrencies, especially Bitcoin. The company’s CEO, Jaime Dimon, famously called the cryptocurrency a “fraud” in 2017.
JP Morgan Chase has since unveiled its own crypto-like currency and settlement solution, JPM Coin.