A judge has preliminarily approved a $100 million class-action settlement with customers of credit card companies and JPMorgan Chase & Co. The credit card company customers accused JPMorgan Chase & Co. of attempting to bring in higher fees for their cards by boosting minimum payments. JPMorgan Chase & Co. is the largest bank in the United States.
The attempt to increase minimum monthly payments for thousands of credit card holders came in late 2008 and early 2009. The settlement involves customers who even transferred their credit card balances from other lending companies. The increase in minimum payments went from 2 percent of account balances to 5 percent of account balances.
JPMorgan Chase & Co. is headquartered in New York. Its cardholders claim that the bank increased its minimum payment requirement in order to force the customers to accept the higher rates so they could keep a lower payment requirement or cause the cardholders to make a higher number of late payments. Late payments incur fees and interest rates.
On Thursday, Judge Maxine Chesney, of the U.S. District Court in San Francisco, granted the preliminary approval of the settlement. The judge approved it as fair, adequate and reasonable. Final approval will be determined at a hearing scheduled for November 16. Close to $25 million of the settlement will be used for legal fees and $1.5 million will be used for litigation fees, according to court documents.