On May 13, 2011, the District Court of the Northern District of California certified a class action on behalf of certain credit card holders against Chase Bank. Chase credit card customers allege in the complaint that they were offered balance transfer loans or loans in the form of blank checks that were connected to but with different terms than the credit cards. The Plaintiffs also claim that the promotional rate loans offered by Chase had terms that were at low interest rates usually with APR’s or interest rates set at 2.99% or 3.99% “for the life of the loan.” Chase used the promise of these low fixed rates for the life of the loan to induce consumers to transfer their balances from other credit card accounts to a Chase account. Most people paid a substantial balance transfer fee to Chase to lock in the promotional rates for as long as there was a balance remaining on the transferred amounts.
In November 2008, Chase sent its customers a notice stating that the minimum monthly payments would go up by 150%, from 2% of the balance to 5% of the balance. The notice of change in terms sent by Chase also added a new finance charge misleadingly described as an “Account Service Charge of $10 per month.” This new account finance charge effectively increases the customers’ interest rates even more.
Chase asked the Ninth Circuit Court of Appeals to allow it to appeal the order granting class certification. The Ninth Circuit has discretion to allow such appeals. However, the Ninth Circuit declined to exercise its discretion, and declined the appeal.
To see the order, click Moore v Chase Order.