Chase Bank Settles on Credit Card Crypto Transactions Class Suit
US-based Chase Bank has settled an agreement with a class of customers who claim the bank billed their credit card cryptocurrency transactions by classifying them as expensive cash advances without prior warning.
Chase’s customers Brady Tucker, Ryan Hilton, and Stanton Smith accused the bank of breaching the cardholder agreements with them and other customers by changing the way it billed purchases of cryptocurrency without notice. In January 2018, the bank allegedly decided to change the way it classified such transactions and started to treat them as cash advances which are subject to additional fees and interest. Shortly after, Chase moved to block such transactions altogether.
A joint letter filed by counsel for Chase on March 10 indicates the parties expect to present Judge Katherine Failla of the US District Court for the Southern District of New York with a finalized settlement agreement along with related preliminary approval papers within a period of 60 to 75 days, reports Law360.
“I write jointly with counsel for plaintiffs to notify the court that the parties have reached a settlement in principle on a classwide basis,” according to the letter. “The parties are working in good faith to finalize the settlement agreement, preliminary approval papers, and supporting documents.”
The details of the settlement were not disclosed, and counsels for both parties have not released any comments.
Tucker filed suit against Chase in April 2018. Following the bank’s petition for dismissal three months later, the customer filed an amended complaint with two additional plaintiffs, Hilton and Smith, who had similar experiences with their credit cards. Chase’s policy was part of a larger trend at that time, with a number of banks in the US and the UK reportedly halting transactions with known crypto dealers.
Chase has claimed the decision did not represent a breach of contract with the complainants, arguing that crypto transactions are categorized as “cash-like transactions” that are billed as cash advances in line with the customer agreements.
Despite these claims, Judge Failla decided last August the three plaintiffs have offered a credible alternative way to interpret the agreements’ language. Due to this, it could be understood the term “cash-like” solely concerned those financial instruments that are formally related to specific amounts of fiat currency, including traveler’s checks and money orders, the judge said.
Chase is JPMorgan Chase & Co‘s consumer and commercial banking business, with some 4,900 branches across the US.