JPMorgan Chase has agreed to pay $100 million to settle a lawsuit filed by customers who said that the bank increased monthly minimum payments due on credit cards to generate more fees. The settlement, if approved by the court, will end a federal lawsuit filed three years ago in San Francisco.
The lawsuit accuses JPMorgan of improperly increasing cardholders’ minimum payments due to 5% of balances, from 2%, in 2008 and 2009. Credit card customers contended that the bank increased payments on borrowers who could not afford to pay more, ultimately creating more income from late fees. JPMorgan claimed that the increase in monthly payments was both “reasonable” and “sensible.” But if that were true, how do the bank’s bosses explain to shareholders the $100 million settlement being paid?
Source: New York Times
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