San Francisco News Blog

Last week, we wrote about how San Francisco was greeting Chase Bank -- poised to take over 700 WaMu banks in California by the end of March -- with a federal class action lawsuit claiming that the bank defrauded its credit card customers by jacking up the interest rates on "blank check" loans. (Read the post here.)

Well, the warm welcome slap just turned into a warm welcome whack with class action complaint No. 2 in the period of three weeks. Marin County resident Eugene Reede Stockton filed a suit against Chase in San Francisco federal court Monday for alleged unfair business practices and breach of contract for altering the terms of a balance transfer offer.

The suit's allegations bring up a acute case of deja vu vis-a-vis the last lawsuit: Stockton transferred debt from another creditor to Chase in November 2005, "enticed" by a low fixed APR for the life of the loan, according to the suit. Yet in or around November 2008, Stockton received a notice in the mail: He'd be charged a $10 a month "account service fee" starting in 2009, and his minimum monthly payment would jump from 2 percent to 5 percent of his balance.

The class action suit encompasses all Chase credit card customers in California who accepted a balance transfer offer since February 2005, and now must pay a $10 monthly fee. A Chase spokesperson said the company declines to comment on ongoing litigation. 

With Chase's parent company, JPMorgan Chase, having received $25 billion in federal bailout dollars, we're starting to wonder: Can the taxpayers' money be used for attorney's fees to defend a bank for allegedly screwing over the taxpayers?