Chase Put Me On the Road to Financial Recovery, But it Cost them $100,000,000

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I recently received an unexpected letter in the mail from a law firm. Curiously, I opened the envelope, and read the title of the enclosed letter:

Notice of Proposed Class Action Settlement and hearing to Chase Credit Cardholders

I was instantly reminded of the terror that I felt back in June of 2009 when we received five identical envelopes in the mail from Chase; one for each of the credit card accounts we had with them. The letter inside stated that terms of our accounts were being changed, and the minimum payment percentage was being increased. Our monthly payment was going to more than double, making it impossible for us to meet all our monthly financial commitments.

One extremely stressful week later, we were enrolled in a debt management plan with fingers crossed that we made the right choice.

I had always thought Chase’s actions were unfair, but apparently someone thought they were worth legal action. According to the the letter in my hands, although Chase admitted no wrong doing, they were agreeing to settle the lawsuit for $100 million dollars.

To me, $100,000,000 is a rather large number that screams “I’m guilty.”

My first reaction was a sly smile, a feeling of justification, and a fist pump into the air. But the more I thought about it, I wondered if I really should be enjoying these feelings of glee. While the policy change had shoved us to the edge of financial ruin, it was just the final nail in the coffin of our already spiraling out of control finances. It forced us down the road of actually doing something about our debt, and our financial irresponsibility.

This past weekend I attended the Financial Blogger Conference in Denver. Chase happened to be a sponsor, and a representative from Chase was given the opportunity to speak. I don’t remember the gentleman’s name, but part of his presentation spoke to trends in the financial industry, and how Chase was providing products catered to what their customers demanded. One of the things mentioned was how people don’t like surprises. The speaker went on to describe products that Chase was now offering that would help take surprises out of a person’s financial life.

My entire being was rattled with anticipation for a Q & A section after his speech was over. I was begging the universe to let me ask him his opinion on what his customers thought about getting a letter in the mail telling them their monthly payment was going to be raised by 150% without being given a single solitary reason other than, “because we can.” To my dismay, there was no Q & A session.

The settlement proposal states that if accepted, $25 million will go to the lawyers. The remainder will be split up between the rest of the plaintiffs included in the lawsuit. Each plaintiff will receive a minimum of a $25 payment. Most (but not all) will receive an additional payment based upon a number of factors. I don’t know how much, if any, I will receive in addition to the base payment.

Chase didn’t make me ring up thousands of dollars of credit card debt. I did that all on my own. Nor do I blame them for my financial crisis. It was just a matter of time. But that doesn’t excuse their behavior. What they did was just flat out screw their customers. They enticed people to transfer balances to their Chase accounts with a low interest rate, then rolled out a new policy in order to milk as much money out of their new customers as quickly as possible.

Chase isn’t admitting any wrong doing, but is shelling out $100,000,000.

I do admit to having some sense of gratitude for Chase putting the wheels in motion that finally made us confront our financial irresponsibility.

But I’ll wait happily by the mailbox for my settlement check.

Are you part of the class action lawsuit? How would this make YOU feel?

About Travis

27 Responses to “Chase Put Me On the Road to Financial Recovery, But it Cost them $100,000,000”

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  1. Brad Chaffee says:

    Very VERY nicely written Travis! You must have just got back from some kind of financial conference. LOL I enjoyed being able to attend with you my friend I only wish we had more time to hang out!

    What’s sad to me is that this class action lawsuit was put forward on behalf of all the people Chase affected by their decision to make those changes. Who benefits the most from the lawsuit? not the people that were affected but the scumbag, greedy, bloodsucking lawyers who weren’t affected at all. $25? Really?

    Because that’s justice right? LOL

    All in all you’re right though. You did run the balance up. You did owe the money. Chase didn’t do that but they definitely made it hard for you and $25 will fix that. haha! Great article Travis!

    • Travis says:

      I wish we could have spent more time hanging out as well, my friend….we have to figure out a way to get together before next year’s conference.

      The $25 (or whatever I get) surely doesn’t fix anything, but the collective whole ($100 million) is likely a large enough chunk of money in that it may make Chase think twice before acting that way again.

  2. You know, I’ve become a bit cynical about class action lawsuits, because of the gigantic discrepancy in the reward the lawyers get vs. what you get. $25? Really? And they get $25 million? I’m an immigrant, I love America and I defend it to the hilt. But that is a travesty that is uniquely American. The lawyers claim it stops Big Business from trampling on their customers, but does it really? The threat of this lawsuit didn’t stop Chase from trampling you. They just view it as a cost of doing business, and pass that cost on to you.

    You will notice in time that nobody will report on how much of the $100 million they will ACTUALLY pay out, – nobody ever audits that. Don’t be surprised if it’s WAY less than $100 million. The lawyers have no incentive to make Chase look bad for giving them $25 million and everybody else $5 million…

    And your $25 may very well not be a check, but a discount coupon on your next annual fee or some other thing that requires you to spend more than that with them, rather than a check. Even if it is a check, ask yourself: is this a fair reward for what they did to you? And is $25 million a fair reward to what has become nothing more than a legal stickup?

    Hey, you asked… 🙂

    • Travis says:

      Yeah, these class action lawsuits never seem to benefit anyone but the lawyers in any significant way. The remaining funds get split up so many ways it seems hardly worth it to the individual. My only consolation (as mentioned above) is that maybe the $100 Million is big enough to alter Chase’s future actions.

      They may pass that cost along…..but in the near future it won’t be passed along to me. Goodbye Chase credit cards and any financial product from them forever……

  3. Des says:

    You do know *why* Chase raised your payment, don’t you? It wasn’t for their own benefit. It is in their best interest for you to pay as little as possible each month on your credit card so they can keep making tons of interest off you. There was legislation that was supposed to go in that would require banks to increase the amount of minimum payment they require, specifically to “help” people pay off their debt in a reasonable amount of time.

    The government wants your payment to be higher, not Chase. I’m not sure which I think is worse. Lower payments give people flexibility, but also trap them in debt if they don’t have the wherewithal to pay it down or math skills to realize what paying the minimum really does. Nanny state vs. corporate greed? That’s a really tough choice for which is the lesser of the two evils…

    • Travis says:

      I have no proof to back this up, Des, but if it was indeed government regulations that forced Chase’s hand, then why would they settle? Couldn’t they just say “Hey, I’m being forced to raise the minimum payment by your friendly government” and that would essentially make the lawsuit invalid?

      Not that I disagree with your argument totally as I know that many new government regulations have come into play in the last few years, it’s just that I read through the complaint filed, and didn’t see any mention of a government regulation. The complaint was that Chase lured customers by offering low percentage financing until paid off, and then hiked the payment once the balance was transferred.

      I’m certainly open to learning more about this…….I find it rather fascinating.

      • Brad Chaffee says:

        Great points Travis!!

        It does seem odd that there was no mention of regulations in the lawsuit if that was indeed the reason you got that ugly letter in the mail. I’m curious now! haha!

        Chase is no small business so I’m sure if the regulations were the reason then they would have certainly argued that. And then there’s the fact that they did settle.

  4. Brad Chaffee says:

    I definitely have to agree with Des. I forgot that all this happened about the time those regulations were put into place. Most who know me know I believe strongly in personal responsibility and self reliance and the government has been growing by leaps and bounds for far too long.

    If I had to choose between the lesser of two evils I would definitely be more afraid of the governments expansive reach into our lives in order to “protect” us. I can deal with corporate greed for the most part by making certain choices in my life.

    Great point Des! Thanks for weighing in! 😀

    • Travis says:

      If indeed this was an example of “government intervention” it’s a great example of someone not thinking things through. “Hey, we’re going to help you pay off your debt faster…..unless you’re really close to financial disaster, then we’ll help you by pushing you off a cliff.” Thank you very much Big Government.

  5. Banks settle lawsuits because if the case ever goes to jury the jury always sites with “victims”. Juries don’t associate feelings and emotions with corporations as much as they do with people. It’s much cheaper for Chase to settle for $100m despite not claiming any wrong-doing than dragging the case out. After all $100m is chump change for a huge corporation like Chase. That being said, I’m sure they’ll just pass the cost of the lawsuit onto the customer. Sad…

    I’m surprised you didn’t just blurt out your question seeing how aggravated you got with the speech 🙂

    • Travis says:

      I was expecting a question and answer period….but he just said thank you and walked off the stage. I wanted to go find him, but hearing the next presenter was way more important to me than my curiosity.

      It’s unfortunate that 100 million would be “chump change” to a corporation, but you’re probably right.

  6. Vicki says:

    Wow, I have heard that Chase was horrible. I had no idea. And hear I have been bashing Capital One! Just a thought… maybe Capital One took lessons from Chase!

    • Travis says:

      Credit card companies learning from each other? Ooooh, that could be. I’m sure Capital one is just cooking up their own “next scheme” so watch out. LOL.

      I’ve never had to deal with Capital One, but I’ve heard some horror stories about them. To me, they’re all the same at this point. I don’t have the ability to control my spending when they’re in my wallet, so I choose not to carry them any more. Well, for the most part I can’t carry them as almost all my accounts are closed (due to being on a debt management program). But I choose not to carry the lines of credit we still had open, and I will continue to make that choice.

      • Brad Chaffee says:

        Capital One sucks. We had a really bad experience with them, mostly with customer service. I have heard some really bad stories from others about their tactics in the past though.

  7. Jerri Lyn says:

    My company received a check from a Google settlement; I don’t even know what the dispute was about.

    The amount of the check? .47¢. Yes, 47 cents! We cashed that sucker too because we figured if thousands of people didn’t want to make the effort to cash such a small amount then Google gets to keep all that money. It adds up, baby!

  8. Kris says:

    Funny. Not because what they did is humorous, but because the last thing the banks do is help their customers in need. Have no balance? You’ll get great terms. Have a small balance? Get great balance transfer offers. Have a larger balance but pay on time? Maybe they’ll lower your interest. Miss a payment and need help? Naturally, have your interest rate raised, get nasty phone calls (ok, they don’t get nasty unless you don’t pay for a few months), and they WON’T lower your interest rate or help you in any other way. As you can tell I’ve been through this too and still hold a grudge against the banks that wouldn’t help me when I needed it most..

    • Travis says:

      Oh, I know that feeling all too well, Kris! When we were trying to figure out what we were going to do, I called each and everyone of my creditors asking for some sort of help. Even with me threatening that I wouldn’t be able to pay my bill if they didn’t reduce my interest rate, or take some other measure to reduce my monthly payment they wouldn’t budge. AND, you’re absolutely right – if you’re late or miss a payment, they tack on late fees and jack up your interest rate. Exactly how is that going to help an already struggling person? That’s why I raise the one finger salute to credit cards.

    • Brad Chaffee says:

      Kris you really hit the nail on the head with your comment! These banks do everything they can to make you feel they are there for you but really it’s just a shell game. It reminds me of those books I used to read as a kid where I could choose the outcome based on the choices I made at the end of each page. the banks do that with their customers as you successfully pointed out. The only difference seems to be the outcome usually comes out in their favor — with the exception of these types of lawsuits that is. But is 100 million really going to kill them? No, they are going to continue to screw people whenever they can. It’s one of the reasons I’m done with the big banks and its also why I will never have a credit card. With no credit card they will never be able to screw me. Excellent comment btw!! 😀

  9. Monica says:

    I too have a Chase credit card. Soon to be paid in full. They also threatened me with increasing my interest rates as well as all of my other creditors!! I called all of them as well as I had never been late on a payment and couldn’t understand their reasoning. None of my creditors would help me out either! That is when I also joined a Debt Management Program! I have to say that Chase did give me the lowest interest rate after I joined the program, hence the reason they are the last to get paid off. However, I have to say my real nightmare was with Barclays who still wouldn’t help me after joining the program. They increased my interest to 29.94% and stated on the statement that if I only paid the minimum payment that I would “never” get them paid off. So they got paid off first!! Creditors UGH!!!

    • Travis says:

      I had some credit cards at 29% as well before I joined my DMP…..and some people (including myself) just ignore that number and focus on the minimum payment. As long as I can make the minimum payment I’ll be ok…..meanwhile that minimum payment is ALL going to interest. I had a card with such an interest rate that only a few dollars a month was going to bringing down the balance. YUK. It’s the cycle of debt that a person just has to figure out how to break, look at where you’re money is really going, get angry and determined and find a way to get that account paid! You’ve done an amazing job doing just that Monica – awesome job!

  10. I never had a Chase credit card, but after they took over WAMU a few years ago random fees and policies were changing left and right. We left after our ‘free checking’ was no longer such. After 10+ years as a WAMU customer, Chase drove us off in less than a year. I can only imagine the mess you had to deal with as a credit card holder.
    I bet that speaker is used to ducking and dogging angry customers.

    • Travis says:

      It’s like these big companies have just forgotten how to treat the customer, isn’t it Brent? I hear of so many people dumping these large companies for smaller, local financial institutions. Maybe one day they’ll figure it out again……

      I still wonder why they didn’t have a question and answer period. Although last year they had a payday loan guy on stage and he was absolutely shelled when people were given the opportunity to ask questions. Maybe they were trying to avoid that. 🙂

  11. Raquel Keyton says:

    I never got anything about a lawsuit in the mail. I currently have a Chase account on Care One’s program. The increase was one of the reasons I enrolled too. Can I still get part of the settlement?

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