JP Morgan and Chase Manhattan were sued by one of its credit card holders. The lawsuit was about Chase Manhattan’s sudden increase of the interest rate placed on the plaintiff’s credit card transactions. The plaintiff filed a complaint which was subsequently placed under the court’s jurisdiction until it reached the US Supreme Court.
The plaintiff was identified as Mr. James McCoy. He sued Chase Manhattan and JP Morgan for violation of federal laws regarding the interest rates placed on credit cards. McCoy pointed out that Chase Manhattan and JP Morgan abruptly raised the interest rate that he needs to pay at the beginning of his accounts payment cycle.
McCoy’s accusation outlined that the bank failed to inform him that the interest rate of his transactions conducted using the credit card provided by Chase and JP Morgan would be increased. He contends that what the bank has done was wrong since the old regulation law requires them to send McCoy a notice about the increase 45 days before implementing it.
However, the Supreme Court favored Chase and JP Morgan’s claim since the bank was able to show that McCoy has signed an agreement with a clear provision that allows the interest rate of the card holder to rise without prior notice.
The Supreme Court issued a 19-page ruling regarding this issue which eventually overturned the former ruling of the US appeals court from California. During the course of the lawsuit, it was revealed that McCoy had a history of credit card payments default with JP Morgan and Chase Manhattan Issued card.
Tags: JP Morgan, Supreme Court, Credit Card, interest rate, Chase Manhattan
