JPMorgan in $100 million credit card settlement

Source: Reuters

JPMorgan Chase & Co (JPM.N) has agreed to pay $100 million to settle litigation by credit card customers who accused the largest U.S. bank of improperly boosting their minimum payments as a means to generate higher fees.

The class-action settlement resolves a three-year-old case stemming from Chase's decision in late 2008 and 2009 to boost minimum monthly payments for thousands of cardholders to 5 percent of account balances from 2 percent.

... Cardholders claimed that JPMorgan had induced them to transfer balances from other lenders to Chase card accounts, where the bank would consolidate their debt into loans with "fixed" interest rates until balances were paid off.

But according to the cardholders, JPMorgan boosted minimum payments to force them either to accept higher rates to preserve the lower payment requirement, to make more late payments and trigger more fees or a 29.99 percent penalty interest rate, or to close underperforming accounts.

Read more: http://www.reuters.com/article/2012/07/24/us-jpmorgan-creditcard-settlement-idUSBRE86N13O20120724