JP Morgan Facing Federal Lawsuit due to ‘Sky High’ Interest Rates Against Cryptocurrency Purchases
JP Morgan Chase is facing legal action over its extortionately ‘Sky High’ interest rates and fees when customers use credit cards to buy and sell cryptocurrencies.
The multi-national company and its CEO have been vehemently opposed to cryptocurrencies in the past. With Jamie Dimon referring to them as a 21st Century ‘Tulip Mania.
JP Morgan, alongside other major banks, have moved to ban the use of banking and credit cards in purchasing cryptocurrencies. But a Federal Court has since accused JP Morgan of taking on underhanded methods to prevent its customers from becoming involved with cryptocurrencies.
Credit Card users have had their purchases treated as cash advances as opposed to purchases. One such individual affected by this was an Idaho resident and cryptocurrency enthusiast, Brady Tucker.
Tucker, a frequent user of Coinbase, found that when purchasing cryptocurrency on the site. That he was facing ‘Sky High’ interest rates of over 30% annually for his purchases online not including additional fees on top of interest.
A Nationwide class action suit has been filed against JP Morgan on Tuesday, with Tucker claiming that transactions to Coinbase made from any other card incurred no fees. Stating that he and many other credit card holders have been ‘Duped’.
The plaintiff, in his suit, stated that “Chase silently smacked them with instant-cash-advance fees, plus much higher interest rates than normal, and left them without any recourse.”
Tucker seeks to obtain a refund for the interest rate and outstanding fees he was charged with. Amounting to $143.30 in fees and $20.61 of interest charged to him, he is also seeking compensation for damages totalling over $1 million.
The allegations against JP Morgan Chase in the opening statements of the case:
‘But beginning in January 2018, Chase decided to do something very different.
Chase began treating all its customers’ crypto purchases not as ordinary credit card “Purchases” — as Chase had for years — but instead as “Cash Advances” from Chase to the credit cardholder. When Chase implemented this change in late January 2018, Chase did so in total silence.’
If the evidence proves these allegations to be correct, JP Morgan would be in direct violation of US Law. The law in question being the U.S. Truth in Lending Act (TILA) of 1968.
Chase’s Spokesperson, Mary Jane Rogers has since declined to comment. But has insisted that JP Morgan has, at least since February, stopped processing cryptocurrency purchases through its credit cards.
Cryptocurrencies encountered a dramatic fall in value in February, with Cryptos such as IOTA, Bitcoin Cash, Cardano and Ripple falling from 47-59%. February saw banks such as Lloyds, Virgin Money and Citigroup ban the purchase of cryptocurrencies on their credit cards.
Each of these companies cited the past and ongoing volatility within the cryptocurrency market for banning their purchase using their accounts. Bitcoin, in particular, having decline from peak values of $20,000 to reach lows of $6,000.