01 April 2009

Chase Bank Lawsuit - Monthly Service Fees

A California class action suit claims that Chase Bank has violated, among other things, the Truth in Lending Act when it began charging its customers a $10 "monthly service fee" on "balance transfer checks." This fee was applied to existing transfered balances as well as the new ones.

Many cardholders became irate because this fee was not disclosed to them at the time they used their transfer checks. Many people refused to pay the fee. To make matters worse for themselves, Chase Bank then upped the interest rate and minimum monthly payment on these particular account holders. This is another action, not in the original terms of the transfer contract, that is part of the lawsuit.

Many people who used the balance transfer checks were struggling to keep control of their finances. They were consolidating high interest loans into a single low interest loan. The monthly fee and raised rates ended up making finances more difficult. Some cardholders would have been better off not doing the transfer when the new terms are considered.

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