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JPMorgan sued over fees for cryptocurrency purchases

Reuters  |  NEW YORK 

By Dena Aubin

NEW YORK (Reuters) - & Co has been hit with a lawsuit in Manhattan federal court accusing it 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.

Filed on Tuesday on behalf of a proposed nationwide class, the lawsuit said Chase 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.

declined to comment on the lawsuit but said the stopped processing purchases of cryptocurrency on Feb. 3 because of the credit risk involved. Customers can use their Chase debit cards to buy cryptocurrency from their checking accounts without incurring cash advance charges, she said.

Several banks in Britain and the United States, including Lloyds Banking Group Plc, Virgin and Citigroup, banned the use of credit cards to buy earlier this year after a dramatic fall in the value of bitcoin, the most popular virtual currency.

has fallen in value by more than half from a peak of almost $20,000 in December amid concerns about regulatory crackdown.

The named plaintiff in the lawsuit, resident Brady Tucker, 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, his lawsuit said. Hundreds or possibly thousands of other Chase customers were hit with the charges, Tucker said.

Tucker called Chase's customer service line to dispute the charges but the refused to remove them, according to the lawsuit.

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. A could not be reached for comment.

The lawsuit accuses Chase of violating the U.S. Truth in Lending Act, which requires issuers to notify customers in writing of any significant change in charges or terms. The lawsuit is asking for actual damages and statutory damages of $1 million.

The case is et al v Chase USA, U.S. District Court, Southern District of New York, No 18-3155

(Reporting by Dena Aubin; Editing by and Phil Berlowitz)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, April 11 2018. 23:07 IST
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