Chase rate hikes subject of class-action suit

Before you go, we thought you'd like these...
Before you go close icon
Chase did a very sneaky thing to Barry Woldman, an average American from Illinois. A year ago, the bank told him his credit card interest rate was going to go up, and if he wanted to opt out of that increase, he'd have to cancel his account. Last March, Woldman did just that and continued to pay off the balance of the closed account. In November, he was shocked to find that the interest rate on his remaining balance had skyrocketed from 11.99% to 17.99%.

This happened despite his receiving a letter from Chase confirming that his account was closed and he would continue being charged the original interest rate. Chase's reasoning: Woldman failed to respond to a notice Chase sent in August telling him that he needed to close his account if he wanted to avoid a rate hike. Never mind that Woldman's account was already closed.

Now, Chase could be facing a class-action lawsuit over this practice. "We want Chase to stop what it's doing and pay back the class members for the money we believe they've wrongfully taken from them," says Adam Levitt, the law partner from Wolf, Haldenstein, Adler, Freeman & Herz LLC in Chicago, who's representing the plaintiffs. "Chase made a deal with Mr. Woldman and other card holders," Levitt said in an interview with WalletPop. Levitt charges Chase violated this deal when it hiked rates on closed accounts.

In the filing, Levitt details how Chase sent letters to Woldman and other plaintiffs in August stating that their interest rates would rise unless they opted out and closed their accounts. "Chase's proposal required an impossible response from these former cardholders -- namely, the reclosing of their already closed accounts," the complaint reads.

Levitt adds that many, many Americans could have been affected. "Chase obviously has millions of cards in the market. Based on the investigation we've been conducting, we believe this problem is a widespread one. We believe it's thousands of people."

Although class-action cases can take months, if not years, to wind their way through the system, Levitt says his firm will fight to get both justice and money delivered for the affected cardholders as soon as possible. A spokesperson for Chase says the bank will not comment on pending litigation.
Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners