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JP Morgan Chase False Reasons for Credit Denial ECOA Class Action

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JP Morgan Chase Building

Plaintiff David Denton researched credit products so he could consolidate his debts at favorable terms, the complaint for this class action says, and he eventually settled on a credit card offered via a pre-screened solicitation by JP Morgan Chase, which offered $14,000 in credit, no transfer fees for balance transfers made within the first sixty days, and no interest for fifteen months.

He obtained the card, but when he actually tried to make the balance transfers, the company refused to grant him the original terms. The complaint claims that, in telling him why, Chase violated both the federal Equal Opportunity Credit Act (ECOA) and the Virginia version of the same law (VECOA).

Two classes have been outlined for this action.

  • The ECOA (National) Class is (a) all natural persons who have applied for credit with Chase Bank USA, NA between October 12, 2015 and October 12, 2017 (b) to whom Chase provided an ECOA adverse action notice (c) similar to the notice attached as Exhibit 1 to the complaint for this action.
  • The VECOA (Virginia) Class is (a) all natural persons living in Virginia who have applied for credit with Chase Bank USA, NA between October 12, 2015 and October 12, 2017 (b) to whom Chase provided an adverse action notice (c) similar to the notice attached as Exhibit 1 to the complaint for this action.

ECOA states that when a creditor takes adverse action against a consumer, the creditor must provide a notice that complies with certain requirements.

Denton applied for the Chase card in October 2015 and was granted it, with the promised $14,000 in credit, according to the complaint. He immediately requested balance transfers of a little over $12,000 from other accounts.

However, several days later, he received the letter that is Exhibit 1 saying, “To ensure you have enough credit available for purchases we limit the amount of your credit line that is available for balance transfers.” Rather than the $12,000 balance transfer he’d requested, Chase had accepted transfer of only $3,920. The reason given as “BL-Request exceeds balance transfer limit.”

When Denton called Chase, the complaint alleges that a representative told him that the reason given in the letter was not the real reason; the real reason was that a credit report Chase had obtained showed him as being thirty days late on his mortgage payment.

The complaint alleges that this was a false report and that Denton was not late on his mortgage payment and never had been.

According to the complaint, the letter Denton received thus violated ECOA and VECOA rules in not stating the real reason he was not allowed to make the transfers. In addition, the complaint alleges that the letter violated the laws in other respects, such as not including certain mandatory language and not including the credit score they had received for Denton. 

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