SAN FRANCISCO--(Business Wire)--
The law firm of Girard Gibbs LLP (www.girardgibbs.com/chase.asp) has filed a
class action lawsuit against Chase Bank USA, N.A. after the credit card issuer
more than doubled minimum monthly payments and imposed an "Account Service
Charge" on customers who had accepted its fixed-rate balance transfer offers.
The class action complaint alleges that Chase induced preferred customers to
take out sizable balance-transfer loans by offering 2.99% to 4.99% promotional
rates that would remain fixed for the life of the loan. It is alleged that after
soliciting these long term loans - and charging transaction fees of up to 3% of
the loan amount - Chase implemented a "forced loan modification program" to
coerce consumers to surrender the benefit of their fixed promotional rates.
Chase has recently notified customers that unless they pay off their entire loan
balance within 30 days or accept a higher annual rate, Chase will more than
double their required minimum monthly payment and charge a $10 fee for each
month that the loan remains outstanding.
"At this point, it appears that the people who are subject to the loan
modification program are those who have consistently made timely loan payments
and otherwise met their obligations," said Eric Gibbs, a lawyer who represents
the plaintiffs. "Chase`s conduct is having a real impact on our clients. There
is no bailout on their horizon, as they are people who made prudent decisions
with respect to managing their debt and paid their bills on time. They are now
being penalized for doing so."
The number of Chase customers that could be affected by the class action lawsuit
remains unclear, but comments by Chase put the upper limit at 500,000 people.
Chase has not yet formally responded to the lawsuit, but has asserted that
because of legal doctrines such as preemption and mandatory individual
arbitration, its conduct is not subject to court scrutiny.
"The reality is that these legal doctrines - preemption and mandatory individual
arbitration - strip people of their fundamental rights and the ability to make
sure their agreements are honored," said Gibbs. "We are hopeful that in this
case, our clients will get their day in court."
If you wish to discuss this action or have any questions concerning your rights
as a Chase cardholder, please contact Girard Gibbs LLP
(www.girardgibbs.com/chase.asp) or call 866-981-4800.
Girard Gibbs LLP
Eric Gibbs, 415-981-4800
Copyright Business Wire 2009