JP Morgan Chase Pulls a Bait and Switch on Consumers

As corporate banking executives meet with congress regarding questionable banking practices, consumers are still reeling from a major round of threats from JP Morgan Chase Bank.

Attempt #1 - The Rollback of Due Dates

In 2007, JP Morgan Chase began to systematically roll back the due date on their customers' bills. In most cases, those customers who complained were told that the "updated terms" on the account had been mailed out in a notice the previous month. The notice, according to Chase, indicated a "recalculation" of the assigned due date on the bill, however the customer had the option to revert back to the original due date if they preferred.

The damage caused by this tactic was a sweeping influx of revenue for Chase in terms of late fees that a large majority of customers never bothered complaining about or even noticing. The late fees, at the time, were $35. The following year, Chase reduced the late charges to $10 for accounts where payments were made just a day or so after the due date. Customers who complained, if it was one of the first times the account had a late payment, Chase refunded the fee. However, by that point thousands of Chase customers had been hit by unfair late charges.

Attempt #2 - Charges, Fees and Threats

Through 2008 and 2009, JP Morgan Chase began systematically charging long-time loyal customers with rotating balances and low promotional offers an erroneous fee of $10 per month and increased the minimum payment by about double. This meant that a fiscally responsible customer who paid their bill on time every month and originally had a minimum payment of about $250 a month saw a tremendous increase in the minimum payment - up to about $600 as well as the $10 monthly charge.

When customers were contacted regarding the odd fee and the increased minimum payment, Chase customer representatives responded that if the customer was willing to give up their promotional rate (typically ranging from 3.99% to 5.99% fixed rate) and accept an "alternate offer" of a higher interest rate, typically around 7.99% or higher, they would remove the fee and trumped up minimum payment. The statement from Chase Bank was as follows:

"This alternate offer will suppress the assessment of the monthly Account Service Charge, and we'll credit your account for the last monthly Account Service Charge assessed. Your minimum payment calculation will also return to the greater of the following:

* $10.00
* 2% of the New Balance or
* The sum of 1% of the New Balance, billed interest, and
any billed late fees. Please note that any amounts that
are past due or over your credit limit may be added to
this calculation.

If you would like us to apply these alternate terms to your account, please send us an email reply confirming your acceptance of the alternate terms. If you prefer, you may also contact Customer Service directly at the phone number listed on the back of your credit card. Note: We must receive your confirmation of acceptance in order to apply the alternate terms to your account. If the confirmation is not received, the Account Service Charge and increased minimum payment will remain in effect on your account."

JP Morgan Chase - Kicking Americans When They're Down

To make matters worse, JP Morgan Chase was one of the major banks that had just received a piece of the major "bailout" package from congress. Instead of working to stimulate lending by lowering interest rates and offering customers more borrowing options, JP Morgan Chase turned to unscrupulous tactics to increase customer interest rates, even in cases where there were preexisting promotional agreements between Chase and consumers. Using these financial strong-arm tactics, Chase attempted to threaten their customers into accepting higher interest rates, or face an unaffordable bill at a time when the country's financial situation is already suffering.

Essentially, JP Morgan Chase was accepting the government bailout, and then kicking the American credit consumer while they're down.

As Chase and other corporate banking executives meet with congress, all Americans should push their Senators and Representatives to use the same strong-arm tactics on the credit card industry as they had in dealing with American consumers. In a world where America is under extreme financial pressure, the credit card industry is now a significant part of the problem - and they need to be dealt with in the same way we would deal with any other threat to American security and liberty.

At the very least, Chase customers should consider leaving JP Morgan Chase if at all possible, before they become the next target of the mafia-like extortion tactics.