The struggle to determine how cryptocurrencies will integrate themselves into the traditional financial world continues to rage on. Last week, Reuters reported that JPMorgan Chase & Co. (JPM) had been named in a lawsuit filed in Manhattan federal court related to its practices regarding users' purchase of cryptocurrencies. JPMorgan is accused of charging surprise fees beginning in late January when it stopped the practice of allowing customers to buy cryptocurrency with credit cards. From that time onward, the bank treated purchases of digital currencies as cash advances.
The lawsuit was filed on behalf of a proposed nationwide class, according to the report. It alleges that the bank charged extra fees as well as markedly higher interest rates on cash advances as compared with credit cards. The suit also alleges that the bank refused to refund charges when customers filed complaints later in the process.
In response to the lawsuit, Chase spokeswoman Mary Jane Rogers declined to comment on the suit specifically. Rogers indicated that the bank ceased processing credit card purchases of digital currencies in early February as a result of credit risk associated with the practice. Rogers also explained that Chase customers can utilize debit cards to buy digital currency from their checking accounts without incurring cash advance charges.
Moving Toward a Unified Position
Chase is not the only bank to have banned the use of credit cards as a means of purchasing digital currencies. Lloyds Banking Group, Virgin Money and Citigroup have all enacted similar policies following the dramatic plunge in cryptocurrency prices in the first months of 2018.
The Chase lawsuit names Idaho resident Brady Tucker as a plaintiff. Tucker faced $143.30 in fees and $20.61 in surprise interest charges by Chase as a result of five cryptocurrency transactions made in the days following Jan. 27 of this year. Tucker believes that hundreds or perhaps even thousands of other Chase customers may also have received similar charges. The suit alleges that Chase "stuck the plaintiff with the bill, after the fact of his transactions, and insisted that he pay it." The suit alleges that Chase violated the U.S. Truth in Lending Act, a statute requiring that credit card issuers notify customers in writing of any changes in terms or charges.
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