June 19, 2007

  • Beware of Chase Bank

    I’m writing this to ask everyone I know to consider boycotting Chase Bank.  It’s not, this time, because they support causes we don’t like, invest in bad countries, fix elections or anything like that.  It’s actually because they take advantage of people in banking.  It’s not often that one is asked to boycott a business for reasons that are so on point.  Chase goes about its work in such a way as to intentionally and blatantly take advantage of people, not just to the point of penalizing excessively for one mistake, although they do that, not just tricking people into making mistakes, although they do that, but even when they don’t make a mistake.  Take your business away from them, not just for me, not just to punish them, but to protect yourself from these kinds of practices in general.

    This isn’t just me.  The Senate has been having some hearings on unethical practices by the three major credit card companies, Chase being the worst of them.  Chase has more customer complaints, particularly regarding credit card practices, than any other bank.  When I read other people’s accounts, not only about what Chase was doing, but how they hung up on people that called customer service, I was not deterred.  Because what they were doing to me was clearly wrong, and those other people must have gotten extremely nasty.  I called.  I made my case, careful not to make it personal (the person on the phone, after all, wasn’t Chase).  I talked to a supervisor.  Everyone I spoke to refused to acknowledge that what they had done to me was unfair.  They answered questions that I didn’t ask.  And when I continued to press them and qualify my point in many different ways, they hung up on me, presumably for not listening to them.

    That’s why I’m writing this.  That’s why I’m writing my Senators and the Senators that have been holding those hearings.  That’s why I’m posting on Chase complaint sites.  That’s why I’m thinking of suing them.  That’s why I’m certainly taking my business away (although I’d prefer to require them to keep their agreement with me).

    Those of you who know me know that my wife and I are both accountants.  You should also know that we have great credit.  We play defense against the common practices of credit card companies, but Chase committed a foul.

    This is what they did, and if you have a chase credit card, watch for this.  I had accepted an offer to carry a balance for the low rate of 3.82 until the balance was paid off in full, a better rate than my equity line, so I put a rather large balance on there.  We wanted to set up automatic payments, but since due dates can change (another trick to be aware of) we set up a recurring payment every week.  Also when we got the bill, we would pay additional amounts, in order to insure that no matter what period the payments were counted, we would at least make the minimum required each week. 

    In most cases, every case in my experience until now, if a payment posts to a particular statement, it is counted towards that statement’s minimum required.  That’s because the due date corresponds with the end of the statement cycle.  Chase put their due date in the middle of their cycle.  In other words, for one particular statement that covered activity from Apr 12 – May 11, the due date for the previous statement’s balance was May 1.  Therefore some of the payments that show up on any particular statement count towards the minimum due, if they are posted before the due date, and some do not.  That by itself is not too much of a problem.  The problem is that payments that post after the due date, don’t get applied to the next minimum due either.  They are lost in the twilight zone.  They reduce your balance, but otherwise are treated as if they weren’t paid.

    Our example:  In that particular statement we had been credited with payments totaling $900.  Our minimum due was about 500.  $600 was paid prior to May 1st, the due date.  $300 was paid after the due date.  Either way, we met the minimum.  The next statement had total payments of about $750.  Again, the minimum, due by May 31, was about $500.  Again, $300 was paid after that date, which left only $450 on this statement that was paid prior to the due date, which was less than the minimum, and so we lost our rate (it shot up to 17.99%) and got penalties.

    But actually the total payments posted since the last “due date” and the current due date was $750.  Because there was $300 that showed up on the previous statement, that was made after the due date.  Chase considers this to be “additional payments in the previous period.”  Similarly the $300 on this latest statement, made after the due date, an amount that did not help us meet our minimums on that statement, won’t be applied to the minimums for the next period either.  There is no way around the fact that we paid more than the minimums required in every period, every month, every cycle, but we still got assessed for underpayment, because Chase things they can spin their dates, in order to ignore payment we made. 

    Another way to look at this is that payments made between the 12th and roughly the end of the month, get counted toward the minimum required, but any payments made between the 1st (roughly) and the 11th, won’t, ever.  Yes, they reduce my total balance, they get “counted” in that way, as customer service was adamant in pointing out (before they hung up on me), but they don’t count towards the minimum due each month, even though they were paid. 

    There’s a lot of fine print in these agreements, but I haven’t seen anything that says I am required to make my payments between the 12th and the end of any given month, for them to be counted.  If I do make payments or rather, if they receive payments, outside of those days, then I need to make them again to meet my minimum!  It is as if my payment requirements went up.    

    In the past, my credit card companies have always given me some latitude, even when I made a mistake, and that’s good business.  This goes beyond bad business.  This is breach of contract.  This is theft.  It’s big business bullying.

    So, please, cancel your chase cards.  Please close your chase bank accounts.  You can include a little note that says, “because you have no morals,” or “you cheated a friend of mine,” or just include a copy of this, and say, “that’s why.”

    And while you’re at it, if you feel like forwarding this to other people, to warn them about Chase, please feel free.

    Andy Glasser

Comments (7)

  • Andy,

    I sympathise wholeheartedly. It's unfortunate that, in modern business parlance, the term "customer service" now refers to a location or jobtitle rather than a business practise. Cancelling the account seems to be the only effective method of communication between the customer and the business nowadays. Well... that and tearing up the endless supply of promotional literature they'll doubtless be sending you in a few days in an attempt to entice you back...

    Good luck !


  • I destroyed all my credit cards about 12 yrs ago and have not had one since.  One is better off borrowing money from the mafia, me thinks...

  • We're having the same problem with Capital One. 

  • I read from consumer advocate Clark Howard's site that Capital One is one of his least favorite.  They apparently offer 0% through December in big bold letters, and then in the "mouse print" say they can change it (the business equivalent of "crossing your fingers").  That can't be legal, not that any of these practices are legal.  They just do it cause they think they can, then if and when it comes down to lawsuits they usually lose.

  • Thanks, Andy. I've been thinking of setting up a bank account here in New York (I still haven't switched from the one I set up in Philly), and I'll be sure not to set up with Chase. Any recommendations?

  • I don't know.  They're all bad.  I like Bank of America here in GA, but I don't know if its an option for you.  I used to hate citibank because they had all kinds of information they were collecting on us, and when they couldn't reach us, they called my dad (it was my wife's card), and then he called us thinking we were in all kinds of debt trouble.  But Chase has made me not as mad about that anymore.  They just take all the joy out of debt.

  • Wow.  Glad I threw their stuff in the trash.  Bank America has been wonderful to us, but we seldom carry a balance.

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