April 12, 20183min1042

JPMorgan Sued for Bitcoin Fraud

JPMorgan is being sued in Manhattan federal court for Bitcoin fraud. Accusing it of charging surprise fees when it stopped letting customers buy cryptocurrency with credit cards in late January and began treating the purchases as cash advances.


Bitcoin fraud lawsuit

The lawsuit was filed on this Tuesday on behalf of a proposed nationwide class. JPM is accused of charging both extra fees and substantially higher interest rates on the cash advances than on the credit cards and refused to refund the charges when customers complained.

The spokeswoman for JPMorgan, Jane Rogers, declined to comment on the lawsuit but added that the bank stopped processing credit card purchases of cryptocurrency pm Feb. 3 because of the credit risk involved. Clients can still use their Morgan debit cards to buy cryptocurrency from their accounts without acquiring cash advance charges.

Several banks in Canada, Britain and the United States, banned the use of credit cards and debit cards to buy cryptocurrencies. This came after a 65% correction of the Bitcoin, the most popular cryptocurrency.

Bitcoin has fallen in value from a peak of almost $20,000 in December amid concerns about regulatory crackdown.

The named plaintiff in the lawsuit, Idaho resident Brady Tucker, was hit with $143,30 in fees and $20,61 in surprise interest charges by Chase for five cryptocurency transactions between Jan. 27 and Feb. 2, his lawsuit said. Hundreds or possibly thousands of other Chase customers were hit with the charges, Tucker said.

Tucker called Chase’s customer service line to dispute the charges but the bank refused to remove them, according to the lawsuit.

With no advance warning, Chase “stuck the plaintiff with the bill, after the fact of his transactions, and insisted that he pay it,” the lawsuit said. A lawyer for Tucker could not be reached for comment.

The lawsuit accuses Chase of violating the U.S. Truth in Lending Act, which requires credit card issuers to notify customers in writing of any significant change in charges or terms. The lawsuit is asking for actual damages and statutory damages of $1 million.

The case is Brady Tucker et al v Chase Bank USA, U.S. District Court, Southern District of New York, No 18-3155


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