Consumer complaint received 2024-12-12 00:00:00
Product: Credit card — General-purpose credit card or charge card
Issue: Other features, terms, or problems — Other problem
Company: JPMORGAN CHASE & CO.
State: TN

Complaint narrative:
Chase misallocated a {$14000.00} payment I made in XXXX XXXX  to pay off a 0 % promotional balance, resulting in {$1900.00} in interest charges that I believe are in direct violation of Title I, Section 104 of the Credit CARD Act of 2009. 

THE MISALLOCATION - In XX/XX/XXXX, I made a payment of {$14000.00} to my Chase Amazon Rewards credit card. This payment was intended to pay off a balance that had been transferred to my account under a promotional 0 % interest rate. This promotional rate was set to expire on XX/XX/XXXX, at which point the interest rate would revert to 23.49 %. ( See attachment 1, page 1 for proof of this payment in my XX/XX/XXXX credit card statement. ) - When Chase received my {$14000.00} payment in XX/XX/XXXX, Chase allocated {$8600.00} of the {$14000.00} payment to a newer balance that had a different promotional interest rate of 1.99 %, which I had transferred to the card just the month before, in XX/XX/XXXX. ( See attachment 2, page 3 for where I got the {$8600.00} amount and proof of how Chase misallocated my XX/XX/XXXX payment. ) - As a result of this misallocation, {$8600.00} from the balance with the 0 % promotional rate began accruing interest at the regular rate of 23.49 % in XXXX of XXXX, when the promotional rate expired. ( See attachment 3, page 3 for proof that this {$8600.00} balance began accruing interest at 23.49 % in XX/XX/XXXX due to Chases misallocation of my XXXX payment. ) DISCOVERY OF THE MISALLOCATION - In XX/XX/XXXX I discovered Chase 's misallocation and the resulting interest that had accrued when I logged into my account to pay off the newer balance transfer ( i.e., the 1.99 % balance from XX/XX/XXXX ). 
- When I made this discovery I immediately paid off the principle that was collecting interest. I left the interest itself unpaid, since I believed it had accrued due to a mistake made by Chase, and I wanted Chase to waive it. 

OVERVIEW OF ATTEMPTS TO RESOLVE THIS ISSUE - Since this discovery I have followed Chases procedures for lodging a complaint as outlined in my credit card agreement. I have tried for two months to reach a resolution with Chase. 
- While Chase has explicitly acknowledged that it is not following the Credit CARD Acts rules in this instance ( see the voicemail transcript contained in attachment 8 ), it still denies that it did anything wrong. Because we are at an impasse, I am now submitting this complaint. 

INJURY Since Chase misallocated my payment in XX/XX/XXXX, the balance of {$8600.00} that should have been paid off before reverting to an interest rate of 23.49 % has accumulated a total of {$1900.00} in interest. 

I recently paid this amount in full to avoid any further interest accruing, but I believe it has accrued in violation of federal law, as detailed above. ( See attachment 9 for proof of this payment. ) Further, the significant time and effort required to resolve this issue have impacted my ability to manage family responsibilities, adding undue stress to my household. 

LEGAL VIOLATIONS - Chase representatives initially told me that the company was following the Credit CARD Act of 2009 in allocating my payment to the balance with the higher interest rate after satisfying the minimum payment ( i.e., the {$8600.00} that went to the 1.99 % balance instead of to the 0 % balance with a promotional rate that was set to expire in less than a month ). 
- However, the Credit CARD Act of 2009, Title I, Section 104, explicitly requires that payments exceeding the minimum be applied to promotional balances nearing expiration. Chases failure to allocate my {$14000.00} payment correctly led directly to the interest charges in question. 
- Here is the text from Title I, Section 104 of the Credit CARD Act of 2009 : " A creditor shall allocate the entire amount paid by the consumer in excess of the minimum payment amount to a balance on which interest is deferred during the last 2 billing cycles immediately preceding the expiration of the period during which interest is deferred. 
- Chases misunderstanding or intentional neglect of Title I, Section 104 of the Credit CARD Act of 2009 is documented in its payment allocation policy, which does not acknowledge the balance transfer exception. That policy can be found here on Chases website under the heading What if I pay more than my minimum balance?, which can be found here : https : //www.chase.com/personal/credit-cards/education/basics/how-are-credit-card-payments-applied - Further, a Chase representative told me in a voicemail :... Im not able to tell you why the Credit CARD Act of 2009 is not followed... I cant seem to come up with the explanation as to why it doesnt follow the Act that youre referring to. ( See attachment 8 for the full transcript. ) BROADER IMPLICATIONS Based on my experience, it seems likely that Chases payment allocation practices systematically misallocate payments for promotional balances nearing expiration, potentially affecting thousands of consumers and resulting in unwarranted interest charges, as well as unwarranted profit for Chase. 

CORRESPONDENCE WITH CHASE Here is a history of my correspondence with Chase about this issue : - In XX/XX/XXXX I called Chase to inform them about the misallocation of my XX/XX/XXXX payment. I was informed by a Chase representative that the allocation was made correctly according to federal law. 
- On XX/XX/XXXX, after researching the issue and requesting my credit card agreement by mail, I mailed Chase a letter outlining how its allocation of my XX/XX/XXXX payment was in violation of Title I, Section 104 of the Credit Act of 2009, and asking that the interest accrued due to their error, which was {$1700.00} at the time, be waived. ( This letter is attachment 4 in my supporting documents. ) - On XX/XX/XXXX Chase replied with a letter that explained its general practices for credit card payment allocations. The letter did not address my specific claim that Chases allocation practices are in violation of Title I, Section 104 of the Credit Act of 2009, nor did it address any of the specifics found in my first letter. ( This letter from Chase is attachment 5 in my supporting documents. ) - After receiving the above letter I received a call from a Chase representative saying that my complaint was closed because Chase had allocated my payment correctly. 
- On XX/XX/XXXX I mailed a letter to Chase stating that I felt my complaint hadnt been understood due to the general nature of the reply Chase had sent, and asking that my specific concerns about the violation of Title I, Section 104 of the Credit CARD Act of 2009 be addressed. ( This letter is attachment 6 in my supporting documents. ) - On XX/XX/XXXX Chase replied with a letter that again did not address my concerns about its violation of the Credit CARD Act of 2009. Further, this letter contained contradictory statements. In the second paragraph, the letter states : You are requesting to apply the payment above the minimum payments toward the Special Promotional Financing ( SPF ) balance. The option to apply payments as requested is not available. But in the sixth paragraph, the letter states :... any payment amount more than minimum will be applied to Special Promotional Financing ( SPF ) balance. Further, the letter conveyed a general misunderstanding of my specific complaint, since it seemed to be referring to current balances and payments, not the payment I made in XX/XX/XXXX. ( This letter from Chase is attachment 7 in my supporting documents. ) - On XX/XX/XXXX I received a call from a Chase representative named XXXX informing me they were doing an investigation into my complaint. 
- On XX/XX/XXXX the same Chase representative called to inform me that they had reached an end of their investigation. In a voicemail, she said :... Im not able to tell you why the Credit CARD Act of 2009 is not followed... I cant seem to come up with the explanation as to why it doesnt follow the Act that youre referring to. ( The transcript of this voicemail is attachment 8 in my supporting documents ; I am happy to provide the original audio file if needed. ) After receiving this voicemail I decided to file this complaint with the Consumer Financial Protection Bureau. 

I made that decision because I believe that Chase is knowingly violating the Credit CARD Act of 2009 in how it allocates payments made to pay off balances prior to promotional interest rates ending, and I know I need help in changing this behavior. 

ATTACHMENTS Enclosed please find these supporting documents : - CFPB attachment 1 : Credit card statement from XX/XX/XXXX showing my payment of {$14000.00} to pay off in full the balance that had a 0 % promotional interest rate. 
- CFPB attachment 2 : Credit card statement from XX/XX/XXXX showing the misallocation of my payment. If you look on page 3 of the statement youll see the amount of {$8600.00} that has carried over from the 0 % promotional rate and is now accruing interest at 23.49 % due to the misallocation of my payment. 
- CFPB attachment 3 : Credit card statement from XX/XX/XXXX showing that the balance of {$8600.00} that resulted from Chases misallocation of my payment began accruing interest at 23.49 % in XX/XX/XXXX. 
- CFPB attachment 4 : My first letter to Chase explaining the issue and asking the interest be waived. 
- CFPB attachment 5 : Chases response to my first letter, in which my concerns about Chases adherence to the Credit CARD Act of 2009 are not addressed. 
- CFPB attachment 6 : My second letter to Chase clarifying my issue and asking that my complaint about Chases apparent violation of federal law in its payment allocation be addressed in future correspondence. 
- CFPB attachment 7 : Chases response to my second letter, in which my concerns about Chases adherence to the Credit CARD Act of 2009 are still not addressed.

- CFPB attachment 8 : Transcript of a voicemail from a Chase representative informing me that although Chase does not adhere to the Credit CARD Act of 2009 they are still considering my complaint resolved and closing the matter.

- CFPB attachment 9 : Credit card statement from XXXX XXXX showing the interest-accruing amount of {$1900.00} paid in full. ( This is the amount Id like Chase to reimburse me via a check or credit on my account. ) - CFPB attachment 10 : Excerpted text of Title I, Section 104 of the Credit CARD Act of 2009. 

REQUEST FOR CFPB ACTION I humbly ask the CFPB to ensure that Chase complies with federal law, including Title I, Section 104 of the Credit CARD Act of 2009, and to reimburse the {$1900.00} in interest charges that resulted from this violation. This reimbursement may take the form of a check or a credit to my credit card account with Chase.

Company response to consumer: Closed with explanation