Monday, May 25, 2009

Court Reinstates Lawsuit Against JP Morgan for Rise in Credit Card Rate

A couple in Oregon who attempted to sue JP Morgan for failing to properly disclose risk factors the bank used to raise its interest rates on its credit cards, has had their suit reinstated.

Earlier, a federal district court in Oregon had dismissed the couple's claim for further proceedings. But the US Court of Appeals for the Ninth Circuit has now ruled that JP Morgan had not made "clear and conspicuous disclosure" of the annual percentage rates it could impose, as required under the federal Truth in Lending Act. Instead, the bank put in writing its reasons for rate increases on apges 10 and 11 of the couple's credit card agreement, "five dense pages after the disclosure of the APR," Judge Diarmuid O'Scannlain, one of three judges on the review panel, wrote.

The couple were prompted to file the suit against Chase after their annual 8.99 percent interest rate shot up to 24.24 percent, apparently with no warning.

Recently, the US Senate and the House or Representatives have both approved bills to curb sudden interest rate increases on credit cards. President Barack Obama will likely sign the bill into law in late May.

MAY-19-09: JP Morgan loses court ruling over credit cards [YAHOO!: JP MORGAN CHASE LOSES COURT RULIGN OVER CREDIT CARD RATES]

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