Chase ‘Interest’ Charge Targeted in Class Action Lawsuit

Chase ‘Interest’ Charge Targeted in Class Action Lawsuit

By Anne Bucher

A class action lawsuit has been filed against JPMorgan and its Chase Bank USA NA subsidiary over allegations that the companies violated their cardholder agreement by erasing the balances of customers who had overpaid their credit card bills.

Stanley H. Epstein filed the class action lawsuit on July 9 in New York federal court. He claims that he had a positive balance of 67 cents that was taken by Chase. He alleges that the company avoided reimbursing millions of its customers by issuing an interest charge in the amount of the positive balance the cardholder had accrued. The company did not inform its customers about this interest charge.

According to the class action lawsuit, Epstein has been a Chase credit card holder since 2009. He pays an annual fee to enjoy the many benefits offered by his Chase Marriott Rewards account. On July 30, 2012, Epstein paid $48 to settle a $47.33 bill on a Chase credit card. Six months later, he noticed a 67-cent charge on his monthly statement titled “Purchase Interest Chrg Debit ADJ.”

Epstein’s monthly statement indicated that he had an “Account Message” which read, “You have a credit balance so no payment is required. You may make charges against the credit or request a refund…. If after 6 months the credit balance is $1.00 or more, we will refund the credit within 30 days.” Epstein claims in the class action lawsuit that the Cardholder Agreement does not indicate that any fees or charges would be applied to an account holder with a positive credit balance.

In May 2013, Chase charged a $45.00 annual renewal fee to Epstein’s account. His 67-cent balance was not applied to the fee because Chase had already taken that money. In the class action lawsuit, Epstein argues that Chase applied the “interest” charge in violation of the Cardholder Agreement. Additionally, he argues that the term “interest” is inappropriate because Chase essentially charged him a fee on his own money.

Epstein claims that he would not have maintained a positive balance on his credit card if he knew that Chase would take that money be imposing an “interest” charge. He argues that Chase has been unjustly enriched by taking money from cardholders with positive balances.

Potential members of the class action lawsuit include millions of Chase credit card holders who were charged “interest” on their positive credit balance. He also seeks to represent a subclass consisting of Chase credit card holders who reside in California.

Epstein accuses the company of conversion, unjust enrichment, fraud, breach of contract, negligent misrepresentation, breach of the implied covenant of good faith and fair dealing, and violation of the Delaware Consumer Fraud Act.

Stanley H. Epstein is represented by Joseph Ignatius Marchese, Neal Jamison Deckant, Scott A. Bursor and Yitzchak Kopel of Burson & Fisher PA.

The Chase Interest Charge Class Action Lawsuit is Epstein v. JPMorgan Chase & Co. et al., Case No. 13-cv-04744, in the U.S. District Court for the Southern District of New York.

Updated July 23rd, 2013

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