Big Bank accused of swindling military members

JPMorgan Chase is facing a federal class-action lawsuit in North Carolina alleging that the banking giant took advantage of thousands of military members throughout the country while they were deployed.

The lead plaintiffs, Gary and Anne Childress of Raleigh, had credit card debt with JPMorgan in 2008, when the National Guard sent Mr. Childress to Iraq, according to the complaint. They argue that the bank charged them more than 6 percent interest in violation of the Servicemembers Civil Relief Act.

The law is meant to protect military members and their families by capping interest rates on their debts while they’re on active duty.

The complaint states that JPMorgan Chase and its related companies, Chase Bank and Chase Bankcard Services, targeted military members with a dedicated website, chasemilitary.com, and slogans such as, “Your commitment is to our country. Our Commitment is to you,” but then “failed to honor the active duty status of America’s fighting forces.”

The bank allegedly charged military members illegally high interest rates and fees while concealing the violations in account statements, which falsely reflected a 6 percent interest rate.

“It would have been difficult, if not impossible, for the individual service members to make the connection and understand that the numbers didn’t match up – and remember that this was happening during times of active duty,” said an attorney for the plaintiffs, Chris Battles of the Shanahan Law Group in Raleigh.

He said the rates varied depending on the particular accounts involved. He hoped to pin down specific numbers during discovery, along with a list of potential plaintiffs.

The Childresses and other service members only realized that something was wrong when they received a $6,899 check from JPMorgan with an apology letter stating that the bank might have overcharged them.

Last year, the Shanahan Law Group filed a class action against Bank of America after it sent out similar letters and checks to its military member account holders. The Childresses are also involved in the Bank of America suit, which is ongoing.

“The difference in the JPMorgan Chase lawsuit is, from what we understand, that their letters were a bit more explicit and specifically referenced the fact that there was some failure on the part of the bank to adhere to the SCRA,” Battles said.

But he added that in both cases there’s still “no way of knowing what these checks are for or where all these numbers came from. At no time has there been any accounting of any of this, even when the banks were issuing checks to purportedly correct the overcharges.”

A JPMorgan spokesman said the bank does not comment on pending litigation. It had not yet responded to the complaint and did not have any attorneys listed in the record.

The complaint further alleges that the bank “systematically steered military families to higher-interest rate products, thereby charging more interest from such families prior to active military service and depriving military families of the intended benefits of the SCRA and [JPMorgan’s] proprietary program” for those families.

An internal audit of the bank’s activities between 2005 and 2013 revealed that it had “systemically had repeatedly violated the SCRA” by overcharging interest on mortgages, personal accounts, credit card accounts, student loans and an array of other product lines, according to the suit.

The discovery apparently resulted in the checks and apology letters.

“The correspondence was often sent in a nondescript envelope that appeared to many servicemembers as a solicitation or ‘junk mail,” the complaint states.

The plaintiffs have asked a judge to find that the bank violated the SCRA and order it to disgorge its “ill-gotten gains.” They’re also seeking treble damages under North Carolina’s Unfair and Deceptive trade Practices Act, along with attorneys’ fees and costs.

Follow Phillip Bantz on Twitter @NCLWBantz