Consumer complaint received 2023-03-14
Company: JPMORGAN CHASE & CO.
State: CA
Product: Credit card or prepaid card
Sub-product: General-purpose credit card or charge card
Issue: Fees or interest
Sub-issue: Charged too much interest

Complaint:
I made a transaction via XXXX on XX/XX/2022. It was a person-to-person XXXX transaction for {$150.00}. XXXX charged me a small percentage as a credit card fee. Then, I was informed Chase was charging me a {$10.00} transaction fee PLUS interest at a daily accrual rate. On my second attempt at resolution, Chase waived the fee but said there was no way to waive the interest except by making a full payment of my entire credit card balance ( around {$1500.00} ). Of course, I am not short the cash and would pay the balance, but do not believe this should be remotely necessary to negate predatory interest on a single, smaller transaction. 

I was never notified as a cardholder that 1 ) there were interest fees applied for XXXX transactions, 2 ) That XXXX transactions were classified as money transfers or cash-like transfers, 3 ) That there were transaction fees involved in XXXX transactions XXXX Again, I was never notified of these things, nor did I consent to them. 

Furthermore, in the written communication I received back after my initial complaint ( attached to this CFPB complaint ), the terms of the policy were incomplete via omission : " The cash advance fee is either 5 % of the amount or XXXX whichever is greater. '' Notice there is no dollar amount following the dollar sign in this quotation. I was charged a {$10.00} fee in this case. 

Here is more detail about why this is an unfair and predatory practice : " The cardholder agreement then defines " Cash-like transactions '' to include " person-to-person money transfers and account-funding transactions that transfer currency. '' That includes XXXX... .I guess? Chase never defines what a " person-to-person money transfer is. Is XXXX such a service? I have no idea, and I focus on this sort of credit card stuff. If I don't know what it means, who would? I don't think the least-sophisticated consumer is likely to think " person-to-person money transfer '' means XXXX. And given the card issuer 's failure to treat XXXX as a cash advance previously, it's all the harder to understand. 

UDAAP Violations? 

And this is the first problem here. The failure to clearly define what is a Cash Advance is unfair and abusive. It's unfair because it causes substantial harm to consumers ( {$10.00} x lots of consumers ) and is not readily avoidable ( how could I avoid it, as I don't know how a transaction will be categorized? ) and has no offsetting benefit to consumers or competition. It's also abusive because it takes unreasonable advantage of consumers ' lack of understanding of the costs or conditions of the product because the costs aren't clear because the consumer can not tell if a transaction is a Cash Advance or not. Likewise it is abusive because it takes unreasonable advantage of the inability of the consumer to protect his/her interests in selecting or using the product because if the consumer can not tell what the product will cost, the consumer can not make an informed decision about whether to use the product. ( One might also argue that the XXXX contractual drafting " materially interferes with the ability of a consumer to understand a term or condition '' of the product. ) There is ( of course ) an arbitration clause, so there won't be any private litigation about this practice, but one can hope that regulators will act, either as part of the supervisory process or through rulemaking. 

Reasonable and Proportionate? 

And then there's the problem of the outrageous fee level : a fee of the greater of 5 % or {$10.00}. It translated to a 50 % fee for me with a small transaction ( as most XXXX money transfers will be and the issuer surely knows ). The fee has no relation to anything in terms of risk. It's not competitively priced -- no one thinks card issuers compete on cash advance fees. And to add injury to insult, there is immediate interest on cash advances -- no grace period -- at Prime + 21.74 % ( that's ~28 % today ). Unfortunately, the CARD Act 's provision requiring certain to be " reasonable and proportionate '' does not seem to cover cash advance fees. 

( There's a subsidiary problem of consumer reliance on the past course of dealingnot treating XXXX as a Cash Advance previouslybut that's more a contract issue than a UDAAP one. ) ''

Company response to consumer: Closed with explanation