Chase’s Opt-Out Notice Misleads Customers Into Canceling

Earlier this month, Chase sent out a change of terms notice which mislead some customers into canceling their accounts by accident.

The letter indicated Chase was changing the default APR to 32.4% (up from 29.99%). The notice said customers could send in a letter and opt-out of the changes.

Acting on Consumerist advice, Reader Ed wrote such a letter and went to DisneyWorld, where he found his card denied when trying to pay for fish and chips at the English Pub in Epcot.

We called Chase for clarification. They told The Consumerist that customers need to indicate in the opt-out letter that the account should remain open, otherwise it will be closed by default. Nowhere on the letter does it say anything to this effect. Here’s the call.

Misleading! Shame! Fire the copy editor! Call transcript, Ed’s letter, and a reprint of Chase’s terms of service change notice, inside… — BEN POPKEN


Call Transcript

    CHASE: Card services… please enter the last four digits of your account number.

    CONSUMERIST:Chase… if you stay on the line, you are consenting to recording this call. Just want to let you know.

    KELLEY: Thank you for calling credit card services, my name is Kelly, may I have your name please?

    CONSUMERIST: Hi, this is Ben Popken.

    KELLEY: Thank you. And Mr. Popken, may I have your 16-digit credit card number please?

    CONSUMERIST: Oh, I don’t have a card with you, but I have a question about your terms on your cards. I’m calling on behalf of a relative, and I’m just trying to get something cleared up. If that’s okay.

    KELLEY: Ok. I’ll do the best that I can.

    CONSUMERIST: Ok. Alright. There was a notice sent out earlier this month. It was about a change in terms and right to opt out. Are you familiar with this?

    KELLEY: It depends on what it’s opting out from.

    CONSUMERIST: Ok, well, there was a change in terms and right to opt out, there was a change in the default APR.

    KELLEY: Mhmm. Oh…mhmm.

    CONSUMERIST: And… it was going up to 32.4%…

    KELLEY: Yes.

    CONSUMERIST: And then there was various other event changes and whatnot. And then there was a section on the right to opt out, and, I have the notice in front of me, and it said that if you sent in a letter, saying that you didn’t want to accept the changes, then you could opt out. And then it also said if your account was open, it would still be available for your use. So, if someone sent in such a letter, what happens? BasicallKey. What would Chase do?

    KELLEY: Alright, now for that opt-out, let me pull up default rate, let me see what that would be. Let’s see. Because normally, when you opt out of anything we send you, it means the account is going to be closed. If you opt out of the change. So if it’s saying the account would remain open, that I need to look up. Because I’m not familiar with that being one of the policies for it.

    CONSUMERIST: Ok.

    KELLEY: I just want to make sure I give you the right information.

    CONSUMERIST: Sure.

    KELLEY: With this standardization notice you can opt out of the change without closing the account, cause at this time we normally do not charge more than a 29.99% variable. And that is probably what the account is at now as far as what the default rate would be. Is the 29.99% variable. So at this time, we’re still allowing the optout from the change. Because its just the default rate.

    CONSUMERIST: Mhmm. Ok.

    KELLEY: And so that’s why we’re able the account to remain open. Now, in the event we change it, and that would be what the rate would go to, then you would have to optout, and it would be a closed account if you wanted to opt out, before the date. But in this case, the account can remain open with opting out from the changes.

    CONSUMERIST: Okay. So…

    KELLEY: But if you do send a letter to do that, you do need to specify that you want to kee the account open. Cause if you don’t, they’ll close it.

    CONSUMERIST; Oh…okay. Ho. Okay, yeah, Cause my relative did send such a letter, and they wanted to keep the account, but it got closed on them. Then I would suggest, maybe for the suggestion box, add a part in there that says, “make sure to specify that you want to keep the account open.” Because otherwise, I’m not seeing here anything that says if you don’t, we’ll close the account.

    KELLEY: Mmmkay.

    CONSUMERIST: In fact, it says, you’re lead to think that, oh, I can just send in the letter and the account remains open. And everything’s cool.

    KELLEY: Alrighty. I don’t have a copy of the letter so that’s good for me to know, so I apprecaite that information.

    CONSUMERIST: Uhh… okay….yeah, a little misleading there. Ok, well alright, thanks for the clarification.

    KELLEY: You’re very welcome.

    CONSUMERIST: Have a good day.

    KELLEY: Thanks, you too.

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Ed writes:

    “Well, I listened to the sages at Consumerist and wrote a letter to Chase opting-out of their proposed changes to our “contract” which raised the default APR to the usurious 32% level, not to mention the ridiculous privacy changes. According to your report the card would not be canceled. I guess unless you’re in the middle of DisneyWorld with your family when the card was denied at the English pub in Epcot. I called Chase and they told me that since I opted-out, they canceled my account. No phone call to a valued customer, no letter from an annoying “retention counselor”, nothing. I average probably $5K per month on that card and only got it for the Continental miles, but you’d think they’d make some kind of effort to discuss the matter. Just wanted to warn the rest of the teeming millions out there.”

Previously: Beat Chase’s New 32.4% Default APR

Comments

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  1. Someone’s going to get fired because of this because it’s misleading in a bad way for a credit card company, not because some poor consumer may find themselves without their credit cards. When you don’t cancel someone when they want to (AOL), that’s okay from a business perspective (even if it’s a horrible PR perspective), but when you cancel someone when they DON’T want to… hahaha that’s just comedy.

  2. TheUpMyAssPlayers says:

    Chase sucks. Always has, always will.

    Bitter much? Yep sure am!


    There used to be great websites called chasemanhattansucks.com but they got shut down.

  3. Anonymous says:

    You don’t need to write Chase a letter to opt-out!

    Last week, I received the same Opt-out notice but I didn’t write them a letter. I called their customer service number and told them if Chase wanted to keep me as a customer they would need to accept my “opt-out” over the phone.
    No problem. He verified my information and canceled the 32.4% APR. Yesterday, I received notification from Chase in the mail that I had opted out.

  4. rachmanut says:

    I had the same experience as Ed. My account was closed, I called chase, they said I had requested my account be closed. I said that was most certainly not the case, and after a few minutes they reopened the account. My account has airline miles attached and thus an annual fee. Think I should ask for a day’s refund?

  5. stillthesame says:

    I tried as suggested: “I am opting out to not accept the changes and will continue to use the account,” yet they still closed my account – I am now waiting for their response.

    I am afraid they may think “use” = “pay off the balance and not make any more purchases”

  6. rachmanut: A day? Ask for a free year.

  7. snazz says:

    consumerist needs a copy editor…. its spelled “cancelling.” there are two L’s

  8. acambras says:

    Nope, Rachel — when the stress is on the first syllable, it’s acceptable not to double the consonant. Not only is “canceling” all right, but so is “traveling.”

  9. emgeesea says:

    Rachel truly does smell, eh acambras? :)

  10. armishanks says:

    It’s obvious Chase is testing how high it can raise its penalty APR without major complaints from customers.

    So if you object, it conveniently opts you out of being a customer.

    I would complain about this practice to the Comptroller of the Currency, the US govt agency that regulates national banks. It is based in Houston TX and complaint forms can be downloaded from its web site.

  11. acambras says:

    Ah, emgeesea — it’s nothing personal — I’m just a Grammar Hound who can’t help herself.

    Besides, Rachel was the one who brought up the whole “smells” thing — not me. ;-)

  12. MissPinkKate says:

    Hmmm, I don’t know if that’s true- I sent a letter stating I wanted opt out, and I got a letter back saying I had opted out of the charges I could opt out of. No account closing.

  13. Ben Popken says:

    David writes:

    “I just called Chase about my own opt-out notice to be sure that if I did opt-out my
    account would stay open. I was told by the operator that opting out would
    indeed close my account but she then transferred me to a finance specialist
    who offered to lower my variable APR to one percent above the prime rate
    (10.24% in my case). All of the other changes in the notice take effect in
    this case, but your purchase APR actually lowers (assuming you don’t already
    have the lower rate). My brief probing conversation with the specialist
    indicated that there were no hidden charges or contracts in accepting the
    offer. Worth a try if you get the notice and don’t use the cash advance or
    balance transfer services.”