A lawsuit filed against JPMorgan Chase & Co (TIKER: JPM.NYSE) in Manhattan Federal Court accuses the bank of charging surprise fees when it stopped letting customers buy cryptocurrency with credit cards in late January and began treating the purchases as cash advances.
The bank is said to have charged both extra fees and substantially higher interest rates on the cash advances than on the credit cards and refused to refund the charges when customers complained.
Idaho resident Brady Tucker, a named plaintiff in the lawsuit, says he was hit with $143.30 in fees and $20.61 in surprise interest charges by Chase for five cryptocurrency transactions between Jan. 27 and Feb. 2. Hundreds or possibly thousands of other Chase customers were hit with the charges, Tucker said.
The lawsuit is asking for actual damages and statutory damages of $1 million.
“With no advance warning, Chase stuck the plaintiff with the bill, after the fact of his transactions, and insisted that he pay it,” the lawsuit said.
Reuters quoted Chase spokeswoman Mary Jane Rogers as saying that the bank stopped processing credit card purchases of cryptocurrency on Feb. 3 because of the credit risk involved.
She added, however, that customers can use their Chase debit cards to buy cryptocurrency from their checking accounts without incurring cash advance charges.
Several banks in Britain and the United States, including Lloyds Banking Group Plc, Virgin Money and Citigroup (TIKER: C.NYSE), banned the use of credit cards to buy cryptocurrencies earlier this year after a dramatic fall in the value of Bitcoin (TIKER: BTC.EXANTE).
By Siranush Ghazanchyan