Chase Class Action Lawsuit For Adverse Action On Credit Card Application Between 2014-2019 ($148 Estimated) (Chen v. Chase)

Chase Class Lawsuit

Direct Link to Lawsuit Website

The lawsuit alleges that Chase Bank USA violated the Equal Credit Opportunity Act (“ECOA”), 15 U.S.C. § 1691 et seq. requirement to provide the specific reason(s) for taking an adverse action on a credit application by giving “previous unsatisfactory relationship with this bank” or “previous unsatisfactory relationship with us or one of our affiliates” as the only reason for taking an adverse action in connection with a credit card account. Chase denies that its actions violated the law, and no court or other entity has made any judgment or other determination that Chase violated the law.

A settlement has been proposed in the class action lawsuit pending in the United States District Court for the Northern District of California styled Chen v. Chase Bank USA, N.A. et al., Civil Case No. 3:19-cv-01082 (JSC).

File A Claim Here

Who Is Eligible?

The Settlement Class – which may include you – is comprised of all natural persons to whom Chase sent a letter giving either “previous unsatisfactory relationship with this bank” or “previous unsatisfactory relationship with us or one of our affiliates” as the only reason for taking an adverse action in connection with a credit card account during the period beginning January 28, 2014 and ending on November 22, 2019.

The following individuals are excluded from the Settlement Class: officers and directors of Chase and its parents, subsidiaries, affiliates, and any entity in which Chase has a controlling interest; and all judges assigned to hear any aspect of this litigation, as well as their immediate family members.

How Much Can I Get?

Settlement Class Members who submit a valid claim form postmarked or submitted through this settlement website by April 28, 2020, will receive a pro rata cash payment from the settlement fund. Payments are estimated to be $148 based on a projected 7% claims rate, but may be significantly less if there are an unexpectedly large number of claims.

Under the Settlement, Chase has agreed to pay $244,659 for:

1. payments to Settlement Class Members (estimated at $187,659);
2. notice and administration costs (estimated at $52,000); and
3. an incentive award to the Settlement Class Representative of up to $5,000.

Chase has also agreed to separately pay court-approved attorneys’ fees and expenses of up to $185,000 and to stop the challenged practices for five years. In return, Settlement Class Members who do not exclude themselves will release Chase and related parties from certain claims as described in the Settlement Agreement.

Key Dates

• January 28, 2014 through November 22, 2019 – date range of affected people
• April 28, 2020 – last day to submit a claim
• June 25, 2020 – final approval hearing

If the Settlement is approved, Settlement Class Members who submit a valid claim form will be paid within 27 days after final court approval of the Settlement and after all rights to appeal or review are exhausted or any appeal or review has been resolved in favor of the Settlement

Our Verdict

There are numerous readers who were shut down by Chase, and should be included in this lawsuit. Depending on how many people file, you may be able to get $148 on the deal which would be a bit of sweet revenge. I imagine anyone eligible got a mailer about this; there is an option to file online without a claim ID.

Note, the lawsuit does not seem to be about the disclosure at time of shutdown; at that time, they may be able to simply state ‘unsatisfactory relationship’. The lawsuit is apparently about any credit card applications made AFTER the shutdown, at which time there’s apparently a legal requirement for them to give better reason than simply stating ‘prior relationship’.

So I guess, going forward, if you want to get the official word on the reason for a shutdown from any bank, you can apply for a new card from the bank, and they’re apparently required to them give the REASON for the shutdown (e.g. too much revolving credit, etc.) rather than simply state ‘prior relationship’.

I wouldn’t be surprised to see lawsuits against other banks too, my impression has been that banks often write/wrote ‘prior relationship’ as reason for denial. Hopefully, those who have been shut down and applied for new cards can let us know in the comments.

Hat tip to tom0963

Related:

• Sparing your Credit Cards from Shut Down
• Churners, Think Twice Before Applying for a Chase Credit Card
• Chase Account Freeze due to Financial Review