A JP Morgan Chase Bank customer has filed a lawsuit alleging that the institution engaged in “dishonest, unfair, and fraudulent” conduct by rolling over his high-interest “relationship rate” certificate of deposit into a low-interest, standard-rate CD.
The complaint, a proposed class action filed last week in U.S. District Court for the Southern District of New York, alleges that Chase, before the rollover date and without warning, closed the customer’s checking account for inactivity, making him ineligible for the relationship rate.
Plaintiff Brian G. Kempner “expected that, upon maturity, CDs were to be ‘rolled over’ into CDs of the same term and at a then-prevailing competitive interest rate,” the lawsuit states.
Kempner purchased a 9-month CD with a 4.64% annualized interest rate in an amount over $100,000 at the Scarsdale, New York, branch on June 30, 2024, according to the complaint.
To qualify for this relationship rate, he had to open a linked checking account; the bank never told Kempner that he needed to fund the checking account or that Chase would close for inactivity, the lawsuit alleges.
Around March 30, the relationship rate CD rolled over into a standard rate 9-month version, at 0.01%, the complaint states.
Chase didn’t inform Kempner of the checking account closure, his purported ineligibility for the relationship rate, and that his relationship rate CDs would roll over into standard-rate versions “bearing virtually no interest,” the suit alleges.
Kempner alleges that he found out about the rollover only by chance and after the fact, when he checked his financial statement. “To add insults to injury, Plaintiff then had to pay a penalty to ‘break’ the severely disadvantageous Standard Rate CDs prior to maturity, and reinvest the funds.”
Kempner claims breach of contract, negligent omission, negligent misrepresentation, fraudulent inducement and violation of New York business law. He is represented by the Morgan & Morgan law firm.
JPMorgan representatives didn’t immediately respond to an email seeking comment.
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