JP Morgan sued by Coinbase customer over fee changes
The suit claims customers were duped into unknowingly racking up large fees and weren't told of changes.
JPMorgan Chase & Co. is being sued for charging "sky-high" fees and interest rates on cryptocurrency purchases, reports Bloomberg. The class action suit, brought by Brady Tucker, a Coinbase and Chase credit card customer from Idaho, seeks reimbursement and $1 million in damages.
It claims that in January the bank started treating cryptocurrency buys as cash advances without informing its customers of the change.
Tucker says he and other customers routinely used credit card to buy cryptocurrency through Coinbase and other exchanges and would pay it off by the end of the billing cycle.
"Chase silently smacked them with instant-cash-advance fees, plus much higher interest rates than normal, and left them without any recourse," Tucker said.
The reason for using a credit card, Tucker said, was because it was the only way to buy instantly, rather than waiting several days for a bank transfer. He said he would have stopped using the card and would have avoided the fees if the bank had informed him of the policy change.
The fees came up to a total of $143 in fees and $20.61 in interest in January and February alone, according to the complaint. When he contacted the bank, he was told the charges were Coinbase's fault.
This isn't the first time Coinbase has been blamed for excess credit card charges. In February, many customers found themselves being charged multiple times for cryptocurrency purchases, and card issuers were quick to point the finger at the crypto company. Then, as might have happened now, it eventually came out that the problem was on the card issuer's side.
But in that case, the problem seems to have been a technical issue, while this lawsuit relates to accusations of the bank changing its policies without informing affected customers.
Other banks have blocked cryptocurrency purchases with a credit card outright, as Commonwealth Bank did in February. That change was to prevent customers from racking up unpayable debt on volatile crypto purchases. With crypto prices generally slumping since then, some Commonwealth Bank customers might have dodged an expensive bullet.
Disclosure: At the time of writing, the author holds ETH, IOTA, ICX, VEN, XLM, BTC and NANO.
- SEC crackdown on Binance, Kraken – What it means for Aussie investors
- Sam Bankman-Fried found guilty – what it means for Australian FTX victims
- Bitcoin’s price soars over 10% on ETF rumours – here’s why
- New regulations for Aussie crypto exchanges: What it means for investors
- Sam Bankman-Fried’s FTX trial starts tomorrow – what it means for FTX customers