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JP morgan wins the battle after supreme court ruled in its favor

[Tuesday, February 1st, 2011]

Just when all the banks were beginning to think that they were at the receiving end of all things bad, JP Morgan has some good news to share. The Supreme Court of the United States ruled in favor of banks that were being sued for increasing their interest rates, without prior notice to customers who defaulted on their credit card payments.

The Supreme Court said that, as per the old rules and regulations, the bank was justified in increasing the rate of interest. The appeals court in California has filed a suit against the bank in the year 2004 and with the Supreme Court ruling in its favor the bank is out of troubled waters.

According to the CARD Act of 2009, the bank should notify the card holder at least 45 days in advance before increasing the interest rates on the credit cards. James McCoy, the lead plaintiff in this case, accused JP Morgan Chase of violating this rule after the bank increased his interest rates without any warning after his account was closed due to late payments.

In retaliation, JP Morgan Chase clearly proved that the agreement signed by the card member clearly mentions that the customer, Mr. McCoy had to abide by certain criteria in order to stay qualified for low interest rates. The agreement also states that in case the card member violates the qualifying criteria, the bank is at liberty to increase the interest rate.

The Supreme Court standing by the bank said that as per the old rules and regulations, it was not necessary for the bank to notify the customer in advance before the interest change, since he had defaulted on the account.

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