First came the bait: for an up-front fee, you can transfer the balance from your home equity loan, car loan or other credit card balance to your JP Morgan Chase credit card, and get a low fixed rate that applies until the loan was paid off.
Then came the switch: Surprise. The minimum monthly payment jumps from 2% of the loan balance to 5% of the loan balance — and you have to pay a $10 monthly charge too. For example, a cardholder carrying a $20,000 balance on one of these long-term fixed rate loans would see his or her minimum payment increase from $400 to $1,000 as a result, according to lawyers for the cardholders.
Consumers filed 14 separate class action complaints in various federal district courts, charging that Chase violated the Truth in Lending Act and breached its contract with the consumers. Now, just as the cases were about to go to trial in federal court in California, Chase settled for $100 million.